Challenges Abound, So Do Opportunities

Challenges Abound,  So Do Opportunities

The MedTech industry faces a new world full of opportunities. However, uncertainty lies ahead as well. New standards and regulations are emerging, reimbursement rules are becoming more complex, healthcare dynamics are evolving, and companies are facing an increasingly competitive scenario.
It is imperative for the industry to reduce costs, streamline operations, and innovate more quickly.

The Indian MedTech sector is evolving rapidly with the introduction of new age technologies. The time has gone when healthcare was just a doctor-patient interaction. Now there is real-time engagement without any geographical limitation. With continuous adoption of new-age technologies, the healthcare industry is going through major transformation and accelerating toward value-based care outcomes.

The MedTech industry is poised for steady growth, with global annual sales forecast to rise by over 5 percent a year. This projection reflects increasing demand for innovative new devices and services, as lifestyle diseases become more prevalent, and economic development unlocks the huge potential in emerging markets.

US MedTech companies have been the largest supplier of medical equipment to emerging countries, such as China, India, and Brazil, for the past decade or so. But the dominance of MedTech multinationals (MNCs) in emerging markets are increasingly being challenged by emerging market MedTech companies that are becoming strong competitors, not just in their domestic markets but also in other emerging markets that share similar infrastructure and affordability challenges when it comes to using medical devices and equipment. In 2019, the presence of emerging market MedTech companies will continue to strengthen.

China and India are growing at twice the pace of the overall market, driven by healthcare reforms, local government incentives, and overall rising demand for healthcare. Many of India’s domestic MedTech companies, 800 to be precise, produce low-value consumables and disposables that dominate the local market, while the country continues to import most of its specialized, high-value medical devices and equipment. The trend of relying on foreign MedTech companies could change course as more Indian companies are increasingly finding their niche in mid- and higher-end MedTech product segments.

In China, domestic MedTech companies have already found their footing in some of the fastest growing, lucrative market segments. Imaging, in-vitro diagnostics (IVD), and high-value medical consumables are some of the largest and fastest-growing segments, where domestic companies have also emerged as strong competitors in recent years and are hot on the heels of MedTech MNCs. According to an analysis by EIU Healthcare, four out of the ten companies with the biggest share of China’s IVD market are domestic companies. Locally, they beat out growth rates of MNCs by a large margin – the fast-growing companies in the main IVD market segment, such as molecular diagnostics and point-of-care testing, are all domestic players. Of course, there is still room for further growth. Under the Made in China 2025 plan, domestically produced medical devices shall contribute 50 percent of mid- and high-end medical devices by 2020 and 70 percent by 2025. Chinese MedTech companies are increasingly winning over a larger share of not just their domestic market but overseas markets too, and in higher-value segments – quickly catching up with the U.S. MedTech imports for the two countries from each other were almost at par in 2017, with the U.S. importing 6 percent more from China, by value.

The diverse nature of different emerging markets calls for individual entry strategies tailored to specific in-market needs. Key success factors include localizing innovation and manufacturing, adapting to country-specific distribution models and sales channels, investing in local technology infrastructure, and collaborating with domestic value chain stakeholders. Medical devices companies will need to be prepared to invest for the long run, adding complexity and uncertainty to their expected pay-offs – but inaction could see them missing out on potentially lucrative opportunities. While China and India are obvious choices to establish and strengthen presence, other markets should consistently be evaluated as they continue to grow over the coming decade.

Indian market

The Indian MedTech market offers a great opportunity not only by its size, but also because of encouraging policies and regulations introduced by the government over the last couple of years. The Indian MedTech market continues to record robust growth despite a hardened stance on pricing for essential devices. Currently valued at Rs 30,300 crore, it is expected to touch Rs 39,260 crore in 2021.

In India, till recently, medical devices had not gotten appropriate attention from policy designers. Currently, however, medical devices have come into mainstream policy-making, albeit often with the absence of deep understanding about the domain, or without an adequately nuanced approach to factor for its hugely diverse range or spectrum.

The government overhauled the regulatory framework for medical devices in 2017 and introduced the concept of risk-based regulation and brought it at par with international norms. The regulatory licenses issued for import, manufacture, or sale of medical devices have been made perpetual in nature and cut down on unnecessary and time-consuming paperwork, increasing ease of doing business in India. Foreign direct investment in medical devices manufacturing sector is permitted without any prior approval from the government, allowing business to quickly scale up existing operations, infuse capital, and engage in time-sensitive strategic acquisitions. Tweaking of rules for grant of patents and trademarks has strengthened the already robust intellectual property rights regime in India further. Various fiscal measures to promote research, development, manufacturing, and import of medical devices have been launched. For instance, providing weighted deduction for the expense incurred on that front has incentivized scientific research and development. There is minimal or no import duty on certain medical devices.

However, like any other country, challenges in doing business of medical devices in India remain. One major challenge is price control. The government controls prices of certain medical devices by either fixing a price at which they may be sold under a formula or by restricting the ability of the marketer of the medical device to increase its price by more than a prescribed percentage at any given time. The presence of multiple regulators, which may make simple tasks (such as rectification of erroneous declaration on the label) quite a tumultuous affair, remains a challenge. The third challenge is presence of archaic laws that do not permit manufacturers and importers of medical devices to promote their product directly to the customer as cures for certain prescribed conditions and illnesses.

Ayushman Bharat is certainly a move in the right direction as it attempts to address large-scale healthcare financing gaps, and thereby has big potential to expand the market significantly. However, given the complex nature of medical devices, it would be imperative for policy leaders to align a medical technology growth map to the Ayushman Bharat future. This is unfortunately missing today.

Global market scenario

The worldwide MedTech market is poised for USD 594.5 billion by 2024, growing at a rate of 5.6 percent per year between 2019 and 2024, estimates Evaluate. In-vitro diagnostics will continue to be the number one device area in 2024, with annual sales of USD 79.6 billion and a 13.4 percent share of the medical devices industry.

The cardiology industry is expected to grow at 6.4 percent per year to USD 72.6 billion in 2024. Diagnostic imaging will be one of the slowest-growing device areas, with an expected CAGR of only 3.7 percent between 2018 and 2024. Growth in the orthopedic sector is expected to remain sluggish, with a CAGR of just 3.7 percent.

MedTech companies worldwide will spend USD 39 billion on R&D in 2024, with an expected CAGR of 4.5 percent. The R&D investment rate, as a percentage of sales, is expected to decline to 8.1 percent in 2024.

The emergence of personalized medicine, increased use of exponential technologies, entry of disruptive and non-traditional competitors, the demand for expanded care delivery sites, and revamped payment and public funding models are all impacting the financial performance of the healthcare ecosystem.

Companies with emerging market expansion plans should be prepared to face fiercer competition from emerging market players. Cost can be a factor while selecting MedTech products manufactured in emerging markets – the lower-end range of prosthetic limbs from the Western countries cost up to 40 times more than those made in a developing country. However, increasingly, the development of devices and related initiatives that make it feasible and easy to use in emerging markets are driving these choices.

Companies need a strong underlying understanding of local infrastructure, healthcare systems, and users to develop the right type of technology. Limited infrastructure and lack of skilled healthcare professionals in emerging markets make the use of standard medical devices challenging.

Even as rural health initiatives grow with data connectivity and technology, infrastructural gaps and the lack of healthcare professionals will continue to be challenges in emerging markets. There is a need for the right MedTech to support care carried out in rural facilities as they pick up on local demand for healthcare.

Disruptive technologies

Technology remains the best way to achieve the vision of a connected healthcare ecosystem. Medical devices in hospitals/clinics, mobile care applications, wearables, and sensors are all different forms of technology that are transforming this ecosystem. These enable caregivers to perform their roles more easily by automating the logging-on mechanism, automating real-time updates of patient vitals, and providing insights into early detection of diseases.

Technologies help to collect, store, and share critical patient data. By adding an analytics layer to this, caregivers can provide a much better analysis of the condition and recommendations to the patient. AI can assist caregivers in the early detection of diseases based on certain triggers in vitals.

Even outside the hospitals, wearables and smart sensors can help track patient history or any threat to an individual, which may be beneficial, especially to those who are at a higher risk, such as those with diabetes or a history of heart attacks.

From simple fitness and heart rate monitors to smart glasses and smart clothing, there are several options for individuals to watch over their own health parameters in order to not only lead a healthy life but also get expert opinion by simply sharing these parameters with their caregivers.

Digitization of patient health records and EMRs has been one of the crucial steps, which has made such a transformation possible. Several vendors are trying to digitize the ways we manage or share electronic records, payments, insurance, and document these aspects.

There have been various proofs of concept of blockchain applications in the healthcare industry that are theorized to bring together sharing of this information in a secure manner. All these use cases will enable seamless access to historical and real-time patient data to authorized users, eliminate the need for intermediaries, reduce costs, and save time.

Several other technologies are being used to empower healthcare providers with the tools to deliver better care or eliminate the current challenges. For example, augmented reality (AR) and virtual reality (VR), in addition to holograms are paving the way for precise surgeries with the help of 3D models of the patient, which can be analyzed in detail by surgeons prior to performing the actual complex surgery.

AR is being used in medical education, where it has the potential to reduce the count of actual dissections, and greatly help in the study of human anatomy, histology, and embryology. This is especially beneficial today when the need for doctors has vastly increased.

3D printing is also becoming popular in this industry due to its wide variety of applications. From precise casts to accurate replacement of bionic parts, it has found many uses in curing physical injuries. Bionic parts include not just accurate ears or teeth, but also tissues and organs made from the patient’s own cells to reduce the risk of rejection of organ transplants. Also, 3D printing of complex vascular organs and anatomical models has increased the accuracy of surgical process and training. Even in pharmaceutical processes, it is helping in personalized drug dosing, drug delivery, and drug release profiles.

With the future of healthcare focused on personalized care, the adoption of chatbots and AI assistants in this field is beneficial as these help in reducing the workload of doctors and ensuring convenience for patients, in addition to helping in therapy and 24×7 support for patients across the globe.

Emerging technologies can be utilized to cater to the specific challenges faced in India:

  • Provide real-time patient information and assist with symptom-based diagnosis, which can save doctors’ time and enable them to consult more patients.
  • Provide consultations and conduct surgeries remotely, thus bringing healthcare to remote areas with no access to basic healthcare facilities.
  • Enable the patient and healthcare providers to take proactive measures based on an analysis of vitals captured remotely using wearable medical devices.
  • Provide critical home care with the same level of care and cleanliness that is provided in the ICU along with remote monitoring of a patient’s vitals.
  • Decentralize patient health records using blockchain technology to maintain a single source of truth and provide control to patients regarding who can access their records.

Artificial intelligence (AI) can be defined as the capability of devices to learn on their own without an explicit program and act on the information gathered cognitively. AI leaders are working tirelessly to enhance the applicability of AI in health sciences. There is a huge effort to put AI to good use at the very core of the healthcare industry, at the point-of-care delivery.

As technology continues to advance, healthcare organizations are striving to grow with it. Whether one considers the ongoing super-trend of digitization, or examines several of the near-horizon technologies slated to disrupt the industry, most healthcare organizations will look to an underlying digital infrastructure to carry their business into the future. A comprehensive and flexible digital integration platform will allow organizations to:

  • Secure the data movement and integration of PHI, generated by mobile health devices and digital health applications;
  • Connect to partners, suppliers, and logistics companies across the healthcare supply chain;
  • Integrate the data from personal health wearables into an EHR or other digital system of record;
  • Ingest massive amounts of data into analytics clouds for machine learning and AI; and
  • Leverage the massive potential of genomic data with the ability to move and securely share massive data sets.

Never before one had so much healthcare information available at their fingertips, and the potential of devices, AR, VR, AI, and machine learning, and genetic sequencing can truly make a difference in the lives of millions.


In the emerging markets, medical devices and surgical equipment are often looked down upon as cost drivers for limited-budget hospitals, although they offer long-term cost-saving opportunities, create effective healthcare practices, and offer improved patient outcomes. Despite the trends and developments, medical devices companies must take the necessary steps to overcome the challenges pertaining to product quality, regulatory compliance, and data security among several others.

The top five challenges faced by medical devices manufacturers in the emerging markets may be listed as:

Ensuring product quality. Medical devices manufacturers must warrant top-notch product quality to avoid product recalls. For a medical equipment manufacturer, product recall negatively impacts its brand reputation and the company’s bottom line. Thus, ensuring adequate product safety, security, and reliability is extremely crucial to survive the competition in the emerging markets.

Regulatory compliance and government support. Medical devices manufacturers must ensure adherence to product-safety standards and regulatory compliance. Medical devices include every equipment right from thermometers to MRI machines. Medical equipment manufacturing companies must pay attention to compliance and regulatory standards that differ from country to country. Besides this, garnering government support in the form of subsidized research and development, expediting approvals, tax and financial support, and offering favorable tax reimbursements are some of the major challenges for medical devices manufacturers.

Localization of medical devices. In the emerging markets, local medical devices manufacturers are more successful as compared to their multinational counterparts. This is possible because the local players offer tailor-made products aimed at resolving local needs and constraints. The local medical equipment manufacturers often indulge in market research and leverage the benefits of local operations and a domestic sales force to bridge the gaps in the market.

IoT integration and data security. Internet-of-Things enabled medical devices and surgical instruments that are high on innovation pose as a technical challenge for medical devices companies. The growing concern of medical equipment manufacturing companies is to collect, secure, and manage vast amounts of sensitive data that is stored in a cloud-based infrastructure to prevent data theft and breaches.

Cost of product development. The major challenge for medical devices manufacturers is to overcome the burgeoning cost of product development as a result of the challenges mentioned above. Besides technology and government regulations, medical service providers evaluate new products based on their price as against factors like patient experience.

Way forward

There is no doubt that new standards and regulations are emerging, reimbursement rules are becoming more complex, healthcare dynamics are evolving, and companies are facing an increasingly competitive scenario. As we plan ahead, some key trends of the customer will determine the way forward for the MedTech industry.

The healthcare sector is facing severe cost pressures. Both public and private hospitals are caught in a pricing squeeze; as a result, many are emphasizing financial management and operational efficiency by closely watching costs, using technology to become more efficient, and testing different channels and product mix strategies to maximize per-bed metrics.

Also, selectively, private clinics and start-ups are targeting hand-picked clientele by offering high-end diagnostics, maternity care, oncology care, senior day care, and other specialties.

Overall the health system is seeing a lot of ideating and cutting-edge, small-scale pilot programs around mobile health (m-health), telemedicine, and IoMT, although few are being taken to scale. Numerous public and private hospitals are moving to online patient registration and service delivery systems, and digital marketing is becoming more common via mobile apps for appointment booking, paying online, downloading test reports, sharing health tips, and more.

These major trends pave the path, which medical devices manufacturers must follow. This challenging environment requires that medical devices companies reduce costs, streamline their operations, and innovate more quickly.

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