FORUS HEALTH: SCALING UP THE BUSINESS

In April 2013, K. Chandrashekhar, the co-founder and chief executive officer (CEO)
of Forus Health (Forus), sat in his office in Bangalore, India reviewing the
company’s performance during the last financial year. Despite initial challenges,
Forus had managed to sell more than 100 of its patented “3nethra” ophthalmic
devices since inception in January 2010. A quarter of these sales came from
unanticipated export orders and the rest from hospitals and clinics in the domestic
market.

FORUS HEALTH: THE COMPANY

In early 2005, Chandrashekhar and Dr. Shyam Vasudev, who were colleagues at
Philips India Limited, happened to listen to a passionate presentation by Dr.
Aravind, the administrator of the world-famous Aravind Eye Hospital in Madurai, on
its missionary efforts to “eliminate needless blindness.” A poignant documentary,
“Infinite Vision,” which followed the talk, portrayed the plight of millions of blind
poor in the remote villages of the developing world. Vasudev and Chandrashekhar
were visibly moved by the powerful message of the documentary: if soft drinks
could reach the blind, why could not eye care? The duo pondered how they could
contribute to the cause of solving health problems in countries such as India. This
thought led to the establishment of Forus.

Chandrashekhar and Vasudev were reasonably sure that the product concept of a
versatile ophthalmological device, which would combine the basic functions
presently carried out by different devices, would be technically viable. They
decided to name the device 3nethra due to its multi-functionality that included
imaging of the front and back of the eye, generating a report on the patient
through a connected computer and sending the image and report to a specialist
ophthalmologist through telemedicine. The device was conceived to be not only
cost-effective but also more rugged and portable than the imported brands
currently in use. They legally registered the company as Forus Health Private
Limited in January 2010, with an investment of INR10 million and with
Chandrashekhar as the founder and CEO. The word “forus” signified that the
company would be “for us — my community and me.” Vasudev joined
Chandrashekhar in April 2010 as the chief technology officer (CTO) and president,
along with a team of five engineers, some of whom had worked on the prototype of
3nethra with him even before he joined the company officially.

Vasudev closely interacted with the ophthalmologists at Aravind Eye Hospital

during the early stages of product development. He had recognized that the
success of 3nethra entirely rested on its acceptance by ophthalmologists. Because
the quality of the image produced by 3nethra did not compare well with those of
imported brands, Vasudev and his team continuously worked on its enhancement
and provided free upgrades to existing customers. A consultant was appointed to
explore the opportunity to tap the non- governmental organization (NGO) channel,
which played a key role in conducting eye screening camps in rural areas. Such an
initiative, which started with one of the NGOs in Bangalore in September 2011,
resulted in a purchase order for two 3nethra from Sankara Eye Hospital, Bangalore
in January 2012.
EYE-CARE CHALLENGES IN INDIA

A recent World Health Organization study estimated that there were about 550
million people in India — about half the population — who needed some vision
correction. The country also had the largest number of diabetic patients. Eighty
per cent of India’s estimated 15 million blind people, accounting for more than
one-quarter of global blindness, could be cured if diagnosed early. Diabetic
retinopathy, cataract, glaucoma, cornea problems and refractive errors constituted
90 per cent of the causes for blindness. In 2010, India had an estimated 18,000
ophthalmologists and the same number of paramedic personnel that included
ophthalmic assistants and optometrists. A mere 800 ophthalmologists graduated
every year, keeping the ophthalmologist to patient ratio at approximately
1:60,000. The ophthalmologist to population ratio in rural India was abysmally low
at 1:250,000. With such a low number of qualified ophthalmology practitioners,
only 7 to 10 per cent of people at various stages of blindness could be screened and
treated. Since the existing vision care system required specific diagnostic devices
(a single device for every problem) and an ophthalmologist for screening, it was
very expensive. Thus, the rural market remained underserved.

OPHTHALMOLOGY MARKET ECOSYSTEM IN INDIA

Ophthalmology Practice

Of the 20,000 ophthalmologists in India, about 4,000 worked at ophthalmology

hospitals. These hospitals had multiple specialty departments as well as an
outpatient department (OPD) and were equipped with high-end diagnostic devices.
Aggarwal’s Eye Hospital (Chennai, Tamil Nadu), Nethralaya (Chennai, Tamil Nadu),
Sankara Eye Hospital (Coimbatore, Tamil Nadu), Vasan Eye Hospital (Trichy, Tamil
Nadu) and LV Prasad Eye Hospitals (Hyderabad, Andhra Pradesh) with their pan-
India presence and Aravind Eye Hospital (Madurai, Tamil Nadu) with its pan-Tamil
Nadu presence, were a few of the prominent ones in this segment.

An estimated 8,000 ophthalmologists worked at smaller eye hospitals, which had an

OPD and a limited in-patient facility. These hospitals usually had two or three
ophthalmologists, an optometrist and a few nurses. Around 3,000 ophthalmologists
practiced at their own clinics. The rest were with ophthalmology departments of
general hospitals that typically had multiple departments for treatment of several
ailments. The small eye hospitals and clinics attracted patients mainly through
walk-ins. On the other hand, large hospitals, besides attracting walk-in patients,
also held pre-screening eye camps where patients were examined for cataract and
other common eye ailments. If an ailment was detected, the patients were
referred to the main hospital for further diagnosis and treatment. Pre-screening
camps were held for the general public in city suburbs, small towns and villages.
They were also held in cities for people living in residential clusters and for
employees working in large corporations. Large hospitals had the personnel,
infrastructure and networks required for regularly organizing pre-screening camps.
In many cases, these camps were sponsored by NGOs. Often non-ophthalmology
practitioners, such as diabetologists and general practitioners (GPs), referred
patients to the hospitals and clinics and received a referral commission.

Non-ophthalmology Practices

Non-ophthalmology practices, such as diabetic centres, optical shops,

pediatricians, diagnostic centres and GPs, often attended to patients with eye-
related disorders. These practices had very high potential for early screening and
identification of ophthalmic problems, thus aiding reference of such cases to an
ophthalmologist. But such referrals were currently small in number

The ophthalmic devices market in India remained quite fragmented with

multinational firms having significant presence in some segments. The key players
were Advanced Ophthalmic Imaging System, Consolidated Products Corp. Pvt. Ltd.,
Bausch & Lomb, Carl Zeiss, J&J Vision Care, Appasamy Associates, Mehra Eyetech
Pvt. Ltd. and Toshbro Medicals.

CHALLENGES AT EYE CAMPS

Most parts of rural India lacked an eye care facility at primary health care centres.
People from rural areas relied mostly on eye camps conducted in their area by
NGOs such as Rotary, Lions or some charitable institution. NGOs created awareness
about the camp and informed the villagers in advance to ensure that enough
people visited. On any given camp day, about 200 to 300 villagers would visit. Since
they would have to wait for a few hours, they could not attend to their work that
day. A team of optometrists and paramedical staff checked the patients initially
and referred only cases like cataract or corneal opacity to the ophthalmologist
present at the camp. Since such cases were found in 10 to 20 per cent of the
visitors, the ophthalmologist ended up spending more than the required hours at
the camps, so many ophthalmologists attached to hospitals did not want to be
associated with them. As typical eye screening equipment was expensive and could
not be carried to the field for camps, eye inspection was conducted with the help
of a hand-held ophthalmoscope and torch light. For further detailed checkup, the
patient would be advised to visit the ophthalmologist at the hospital.

3NETHRA: THE PRODUCT AND ITS POSITIONING

In 2011, Forus launched 3nethra as a single, portable, intelligent, non-invasive,

non-mydriatic eye pre- screening device that could help detect five major eye-
related ailments such as diabetic retinopathy, cataract, glaucoma, cornea
problems and refractive errors. The device was an imaging unit consisting of a
camera mounted on a stand for positioning the eyes of the patient. The unit could
be connected through a USB interface to an operator console, i.e., an off-the-shelf
personal computer loaded with 3nethra software that aided in imaging, analysis
and communication. It combined the functions performed by multiple stand-alone
devices. The 3nethra device was capable of capturing pictures of the posterior
(retina) as well as the anterior (cornea) of the eye and generated an automated
“Normal” or “Need to See a Doctor” report, which was useful especially during the
early onset of an eye disease when patients did not experience symptoms. Through
telemedicine, the device could connect patients with doctors at primary care
centres or at eye camps to secondary or tertiary care centres for remote diagnosis
of ailments. At about INR0.5 million (US$8,500), the device was considered low
cost, greatly reducing the direct and indirect cost of pre-screening.