According to NITI Aayog’s report Investment Opportunities in India’s Healthcare Sector, released in March, 2021, India is witnessing certain demographic and epidemiological trends, which are likely to significantly boost the demand for medical devices. First, income levels in the country are rising, thereby enhancing the purchasing capacity of households for various services, including healthcare. It is expected that in the coming decade, around 73 million households will move into the middle-class category in India. Second, life expectancy is increasing. It is estimated that in 2050, India will have 300 million senior citizens. Third, in addition to communicable diseases, India is now facing a large and rising burden of non-communicable diseases (NCDs), including cardiovascular ailments, cancer, and mental health.
Further, there is considerable scope for expanding access to medical devices and diagnostics, especially in Tier-II and Tier-III cities as well as in rural and remote areas across the country. For instance, India currently has less than 5 percent of the mammography units available in the United States. Similarly, there are only 120 PET-CT scanners in the country, with the majority concentrated in metropolitan cities.
It is envisaged that the demand for devices will be enhanced through the two pillars of the government’s Ayushman Bharat program. As part of the Health & Wellness Centers being established in various states, the government is emphasizing screening for and early diagnosis of NCDs, including hypertension, diabetes, as well as cancers of the prostrate, breast, and cervix. Under the Pradhan Mantri Jan Arogya Yojana, the demand for health services and consequently medical devices will be boosted across the country, beyond the large cities, through public-private partnerships.
Estimates suggest that India currently has over 6000 types of medical devices; however, a major challenge is that 86 percent of the devices in the country are presently imported. While devices which are technologically less advanced are produced primarily by domestic manufacturers, the higher-end medical products, including ultrasonic scans, cancer diagnostics and medical imaging tools, are largely imported. Further, a majority of the Indian manufacturers are micro, small, and medium enterprises (MSMEs), with an average turnover of USD 450–500 million. An emphasis on achieving scale is, therefore, the need of the hour. A major positive for the sector is the vibrant and diverse start-up ecosystem. There are over 250 such organizations, which are addressing a range of health-related challenges and have played a vital role in the country’s response to the COVID-19 pandemic as well. While the Medtech sector has been adversely impacted by the pandemic, it is expected that it will reach pre-Covid levels around the last quarter of 2021.
Recognizing the significance of the medical devices industry, the Indian government is implementing several policies and initiatives to accelerate its growth. In 2017, the Medical Devices Rules were notified by the Ministry of Health & Family Welfare (MoHFW). The National Essential Diagnostics List has also been finalized to facilitate the availability of and access to quality diagnostics across health facilities in the country. Further, the Clinical Establishment (Central Government) Rules, 2019, have been notified which are expected to lead to greater standardization and improved quality of devices.
For strengthening domestic manufacturing of medical devices, a manufacturing ecosystem cluster development approach has been adopted. Medical devices parks, which provide all the essential infrastructure and allow companies to plug and play, are being developed around five devices manufacturing clusters in India. As part of the AatmaNirbhar Bharat Abhiyaan, the government has announced a performance-linked incentive (PLI) scheme for manufacturing of medical devices in four identified categories. The AatmaNirbhar Bharat package also includes a scheme for developing MedTech Zones, with shared scientific and manufacturing facilities. In addition to boosting domestic manufacturing, the government is committed to strengthening the research and development ecosystem for catalyzing innovation in the Medtech sector as well as optimizing existing technologies.
It is expected that the sector will continue to grow at a fast pace in the coming years. An important avenue of growth is the diagnostic and pathology centers, which are enhancing their offering to include services in specialized areas like neurology and cardiology. Home healthcare services and remote monitoring of chronic conditions through miniaturized diagnostics also have tremendous growth potential.
Disclaimer: Views expressed are personal.