Setting the stage to change the course of healthcare!

We stand on the cusp of a HealthTech Renaissance. Telemedicine, virtual consultations, remote monitoring, and cloud data management have become lifelines for care continuity. A shift is being seen from conventional medicine to pharmacogenomic therapy based on a person’s genomic characteristics, smart implanted devices and stem cell therapies. Ahead is an era of smart and intelligent hospitals, which will have application-based appointments and billing, robotic treatment, location tracking devices, and more patient-centric innovation.

AI is already transforming medical products. ML powers early disease diagnosis and risk predictions based on patterns in data. Surgical robots boost precision and consistency. Wearable health monitors are entering the mainstream. While policy and regulation must foster innovation when managing risks, affordability and usability will be crucial for mass adoption.

Indian MedTech continues to attract investor attention. FDI in medical device sector was USD 3.4 million in first three quarters of 2023, up from USD 1.9 million in 2022 and the highest since 2017, prominent ones being USD 350 mn by Medtronic in Hyderabad and a USD 15.5 mn medical device plant by Omron in Tamil Nadu. Partnerships among stakeholders is key. These include MAHE’s tie-up with Siemens Germany to set up an innovation hub in Bengaluru at an invest-ment of USD 179.7 mn by 2025, and with bioMérieux France to establish a laboratory in Kasturba Medical College in Manipal.

PE-VC investments too have been high. Warburg Pincus’s USD 210 million investment in Meril Life Sciences, Samara Capital’s USD 150 million in Sahajanand Medical Technologies, Temasek Holdings and Oswal Alternates’ USD 85 million in Molbio Diagnostics, Leapfrog Investments’ USD 61 million in Redcliffe Genetics, Lightrock Venture’s USD 32.8 million in BeatO, Sony Inno-vation Fund’s USD 8.5 million in Tricog, and Amicus Capital and other PE’s USD 7.3 million in Rivaara Labs are some of them.

The government will however need to step up. The allocation for the sector, including MoH&FW and the Ministry of Ayush for FY25 is ₹94,000 crores, a modest 1.69 per-cent higher than previous years. There has been a decline in budgeted expenditure for health from total budgeted expenditure, 2.66 percent in FY23 and 2.06 percent in FY24 to 1.98 percent this year. Additionally, considering inflation rate of 5.69 percent in December 2023, health spending in real terms has decreased. The FY25 budgeted expenditure is a meagre 0.27 percent of the GDP. Disappointingly, the ministry’s spend was only 62 percent of the total budget by Q3.

Although the healthcare industry comes with complexities, now is the time to be investing in the space, and setting the stage to change the course of healthcare.