MedTech Industry – Identifying New Drivers for Growth

India’s unique needs drive priorities for the healthcare industry, and MedTech is the backbone for providers/hospitals to offer access to quality care at par with the best in the world. Over the years, we have successfully created a supportive ecosystem for medical devices innovation that helps in promoting the sector. A rational policy framework with liberalized norms, higher investments, innovations, and growing needs of quality care and services for population’s health management are the main driving forces for the healthcare industry in general and MedTech in particular.

Despite several challenges, the Indian healthcare sector offers a huge opportunity. The healthcare industry in India has been one of the country’s largest economic sectors, with regard to both employment and revenue. As per official estimates, in the last few years, the industry has registered a growth of 10 percent and is expected to reach USD 145 billion by 2018 and over USD 280 billion by 2025.
Currently, India has about 750–800 medical devices manufacturers in the country. As per industry estimates, the Indian medical devices market will grow to USD 50 billion by 2025. Currently, India is counted among the top 20 global medical devices markets, and is the fourth-largest medical devices market in Asia.

In terms of policy efforts, with the liberalizing of government policies, up to 100 percent foreign direct investment is permitted in medical devices through the automatic route. Taking advantage of this lucrative opportunity, an increasing number of MNCs are setting up their manufacturing bases in India and a new momentum has been provided to the sector. Moreover, with the new goods and services tax regime, the rate of 12 percent supports the sector in achieving lower costs of manufacturing, and thereby proving beneficial to consumers.

Since 2017, medical devices segment is being regulated by new medical devices rules, under which some devices have been notified as drugs, and now a government panel has recommended notifying a large number of devices as drugs. The rationality of this advisory is being debated at various forums. The regulation is based on wider consultations and keeping in view the requirements of a welfare state, experts and stakeholders are expected to have different views. However, a rational policy framework would certainly create a supportive ecosystem for the growth of the sector.

Liberalized policies are expected to bring in more strategic investments for domestic players, and these new rules are aimed at harmonizing national standards with international standards.

There will be heightened concern associated with the need to control soaring healthcare costs, and the huge need to improve the quality of healthcare while maintaining the operational efficiency of hospital services. The triple dynamics of cost, access, and care proximity to communities/homes is already showing new ways by which medical devices companies can engage/reengage population groups.
Cost and pricing would also remain an issue unless and until stakeholders arrive at a consensus for sustainable price mechanism, which can benefit all providers, manufacturers, and consumers. Declining R&D productivity coupled with increasing pricing pressure has resulted in eroding profit margins for medical devices manufacturers.

Medical devices companies that embrace and align their business strategies according to the changes will sustain and remain profitable. Scalability beyond traditional product offerings and competing beyond a company’s traditional industry will be important, as more companies begin to converge products and services.

Creating a supportive ecosystem for medical devices innovation can help promote the sector. Investments and incentives are needed to set up robust R&D systems to drive growth in the future. Finally, encouraging PPPs for medical education can help augment the workforce skills needed to more quickly adopt the technology. The private sector shares the responsibility to optimise technology in healthcare and it will continue to be a major growth driver.