The COVID situation has brought in a revolution in the Indian medical system’s digital evolution and healthcare facilities. Homecare, tele-consultation and tele-medicine are increasingly being relied upon to augment hospital care treatment. There are also massive opportunities for healthcare sector in X-ray and CT scan for AI-assisted COVID diagnostics and remote healthcare management. India has shown its capability of rapid product development during the COVID-19 pandemic, and with a strong hold in the IT domain, we can build sophisticated software products in the healthcare domain for healthcare informatics and treatment.
COVID-19 has put the MedTech industry at center stage, with unparalleled demand for diagnostic tests, personal protective equipment (PPE), oxygen concentrators, ventilators, and other critical medical supplies. Indian MedTech industry is at the cusp of a great opportunity. The sector is evolving in multiple ways. Technology-led innovations will be the mainstay of future healthcare in India.
The government interventions helped the medical devices industry scale up production during the pandemic. We enjoyed an unprecedented teamwork and rapid proactive communication from NPPA, who became a facilitator instead of a regulator and Department of Pharma, DPIIT, Invest India, and the MSME ministry as they set up help desks to address production bottlenecks of all medical devices, especially those related to COVID, viz., sanitizers, masks, ventilators, gloves, and COVID IVD test kits.
The in-vitro diagnostics (IVD) is recorded to mark a year-on-year growth of 30 percent in 2020, which will be double the market rate in average 10 years. The size of IVD industry in the year 2019 was ₹7500 crore, which was slated to grow at a CAGR of about 15 percent before the COVID crisis.
The sheer amount of M&As and IPOs in the last two years in India and the world indicate an upward trajectory in the MedTech sector, promising long-term stability to fight future battles.
India is the fourth largest market for medical devices in Asia. The medical devices industry in India consists of large multinationals as well as small and medium enterprises (SMEs), growing at an unprecedented scale. The current market size of the medical devices industry in India is estimated to be USD 11 billion. Medical devices sector is projected to register a CAGR of 14.8 percent and is expected to reach USD 11.86 billion in 2021-22. The sector is likely to grow to a USD 65 billion industry by 2024. India’s medical devices industry is poised for significant growth in the next five years.
The Government of India has taken several steps to ensure the growth of a vibrant ecosystem of medical devices manufacturing in India over the past five years:
- Recognized medical devices as a sunrise sector under Make in India campaign, 2014.
- The Medical Devices Rule of 2017.
- The Medical Devices Amendment Rules of 2020 bring all medical devices in India under regulation as drugs.
- The PLI scheme by DOP is designed to attract investors in select four high-technology segments of medical devices and IVDs, where import-dependence is very high.
While we are thankful to DOP for announcing a scheme like PLI, but we request DOP may consider a special provision to recognize the role of the domestic companies (owned by Indians), who have valiantly fought competition and risked investments within the adverse 12 percent to 15 percent disability factor, and not only survived but tried to grow. The growth has been stunted due to certain factors like:
- Lack of adequate infrastructure, supply chain, and logistics.
- High cost of finance.
- Inadequate availability and cost of quality power.
- Limited design capabilities.
- Low focus on R&D and skill development.
We need to make India great again, not only by attracting overseas MNCs but also supporting the Indian champions, who are the only fall back option in every crisis including COVID, vis a vis overseas MNC-owned companies, who historically wish to profit from our market but are shy of risking investments in creating factories.
To address the above disability factors, the Government of India needs to bring forward Make in India-enabling policies as done for mobile phone industry:
- Tariff policy to protect Investment proportional to manufacturing capability.
- Separate medical devices law that encourages innovation and discrimination minor offences.
- Promoting ethical marketing by capping MRP over Import landed price/ex-factory price.
- Incentivizing quality by preferential pricing for voluntary certification from QCI.
- Restrict import of preowned medical electronics.
We also need to consider to add to the PLI scheme:
- All medical electronics.
- Drug/vaccine delivery devices and technologies.
- All implants.
The investment needs to cover all investments, including land, building and plant, machinery, and utilities as in medical devices buildings and utilities are designed around a process, e.g., clean room, power backup, ETP, air conditioning, etc., and gestation periods are long.
Additionally, medical parks can be created with common product categories with common technologies so that they are specialized interdependent cooperative clusters around key common raw material/component suppliers, e.g., AMTZ at Vishakhapatnam in Andhra was envisaged to be focused on medical electronics with mother units of X-ray tubes to attract X-ray manufacturers, and of magnetic coils to attract manufacturing of CT scan and MRI equipment, and of EMC testing for aiding manufacturing of large medical electronic equipment.
Similarly, we recommended Aurangabad in Maharashtra and Karnal in Haryana to focus on orthopedic implants and surgical instruments by inviting and supporting a stainless steel alloy manufacturer instead of Industry being dependent upon expensive imports from Sweden, etc., as well as a strategically located logistics hub for medical equipment online traders and for national distributors considering its central distance to all parts of India.
For Chennai, we recommended to develop a medical park focused on Instruments – medical electronics and IVD; Trivandrum (Kerala) to have a medical park focused on latex and rubber technology with commonly shared zero-discharge effluent-treatment center; Noida (UP) to focus on small consumer electronics and midsized electronics along with IVD reagents in collaboration with NIB; Hyderabad (Telangana) to focus on medical electrical equipment and implants needing clinical research studies; and Bangalore (Karnataka) a medical park to focus on embedded and stand-alone software, AI, and IOT app-based products.
The focus of an existing or created cluster needs to be on shared backward integrated resources to provide economies of scale and interdependent expertise of core skills and technologies that are complementary but not as disruptive competition to existing clusters, projects that encourage import substitution needs to be encouraged and prioritized considering the scores of medical devices that continue to be imported.
Indian imports of ₹45,000 crore that account for 85 percent of the medical devices market are a healthcare security risk that needs to be addressed. It is also an opportunity for Make in India and innovation in India.