Indian healthcare landscape – Poised for significant transformation

With MedTech and IVD sectors emerging as critical players in meeting evolving healthcare demands, driven by a confluence of factors including government initiatives and regulatory reforms, they are forecast to experience remarkable growth in the years ahead.

Currently, approximately 70 percent of medical devices in India are imported. This stark contrast between import and domestic manufacturing presents a substantial opportunity for medical device manufacturers to bridge the gap through indigenous production and sales.

Government policy
In a strategic move to streamline regulation, incentivize domestic manufacturing, and foster research and development, the Union Cabinet recently greenlit the National Medical Devices Policy, 2023. This policy is designed to accelerate the growth of the medical devices sector, prioritizing a patient-centric approach. The National Health Policy 2017 emphasizes the adoption of technologies to ensure affordable and equitable healthcare access. Initiatives like Make in India and Startup India actively encourage indigenous manufacturing and entrepreneurship.

Furthermore, the Production Linked Incentive (PLI) scheme for medical devices and the establishment of four upcoming MedTech parks across India, in the states of Himachal Pradesh, Madhya Pradesh, Tamil Nadu and Uttar Pradesh indicate concerted efforts to boost domestic manufacturing.

Regulatory reforms
Historically, India’s medical devices sector has operated with limited regulation. However, significant changes have been witnessed in recent years. The implementation of the Medical Devices Rules 2017 by Ministry of Health and Family Welfare, aligned with global standards, has mandated adherence to safety, efficacy, and quality standards. The Central Drugs Standard Control Organization (CDSCO) has taken proactive measures to expedite product approvals and enhance industry standards, fostering trust in product quality and safety. The regulatory environment for MedTech and IVD has eased significantly in recent years. The limit for expedited approval of select medical devices was raised from ₹50 lakhs to ₹150 lakhs. In 2022, 37 medical devices including glucometers, thermometers, and blood pressure monitoring devices were exempted from the requirement of mandatory local clinical trials before approval.

Import policy and domestic manufacturing
India’s annual import of medical devices, valued at ₹63,000 crore, underscores the government’s push to increase India’s share in global manufacturing. The distribution, import, and manufacture of cosmetics, drugs, medical devices and IVDs are regulated by the Drugs & Cosmetics Act, 1940 and Drug & Cosmetic Rules, 1945. The government has taken steps to rationalize import duties and promote domestic production through initiatives like preferential market access (PMA) and the production-linked incentive (PLI) scheme for medical devices.

India’s evolving import policy for medical devices aims to balance import substitution objectives with ensuring patient access to advanced technologies. Import duty rationalization and preferential access initiatives are designed to promote domestic manufacturing while catering to patient needs. Moreover, the introduction of 60 percent domestic value addition norms for device imports encourages partnerships between foreign companies and domestic manufacturers, facilitating mutual growth.

Government spending and healthcare access
With an eye toward increasing India’s share in global medical device manufacturing, the government is actively investing in initiatives such as Ayushman Bharat and the National Health Mission.

The Indian government unveiled the National Health Policy in 2017 with the aim to increase health spending to 2.5 percent of GDP by 2025. Currently, public expenditure on healthcare is only 1.2 percent of GDP. Initiatives such as opening ICMR labs to corporate and manufacturing sectors for developing MedTech products highlight the government’s commitment to universal healthcare access. Increased budgetary allocations for public health programs and infrastructure development create opportunities for MedTech/IVD companies to deliver patient-centric solutions, especially in underserved regions.

Setting standards
Stringent quality and safety standards are indispensable for healthcare technologies. Medical Devices and Diagnostics Division of Central Drug Standard Control Organization (CDSCO) has developed structured regulations for medical devices. India’s regulatory bodies continually update standards through the Bureau of Indian Standards to align with international benchmarks, ensuring patient safety and product quality.

Addressing challenges
Rising lifestyle diseases, greater health awareness, expansion in health insurance, and growth of medical tourism are key factors that will fuel growth.

However, price controls, arbitrary price caps on devices, high GST rates of 18 percent on IVD kits, long tendering cycles of 6-9 months by government hospitals are some factors that may hamper growth of the industry. Resolving these barriers, alongside addressing intellectual property rights issues and fostering healthcare solutions for all socioeconomic strata, is essential for inclusive and sustainable progress.

India’s MedTech industry holds immense promise, underpinned by favorable policies, dynamic regulations, increased healthcare budgets, and a steadfast focus on quality. Multipronged efforts to promote self-sufficiency, quality, safety, equity, and competitiveness will undoubtedly catalyze the realization of its full potential, driving healthcare progress forward.