| Anjan Sen |
The healthcare market in India reflects a strange paradox. On one hand, it provides superior healthcare delivery, which has made India one of the sought after destinations for medical tourism, while on the other hand a large part of the population lacks quality, accessible and affordable healthcare services, owing to inadequate infrastructure (especially in smaller towns and rural areas) and low availability of qualified medical professionals.
While a better infrastructure and availability of qualified physicians will help alleviate the situation, it is only a part of the solution. One of the important elements that need to be addressed is inculcation of innovative medical technology in the prevailing system. However, availability of affordable and reliable medical devices still poses a significant challenge as currently, 85 per cent of the medical equipment demand is met by imports, primarily from US. Domestic manufacturers target the low end segments wherein competition is intense. Paucity of adequate regulatory control has sometimes led to production of equipment that lack consistent quality. Manufacturers in this segment are also attracted to the better price realisation of the semi-regulated markets and a large part of their production is exported.
However, the need of the hour is product innovation to target requirements of the Indian consumers, economy at a reliable quality and advancements to cater to the changing disease profile. Interestingly, most stakeholders including the government, public and private healthcare providers believe that penetration of technology in the healthcare sector could lead to preventative care, early diagnosis, better clinical outcomes, a proficient healthcare delivery chain, and hence they acknowledge the potential of product innovation.
Concerns
The industry continues to face the following challenges that need to be overcome before it can experience maximum growth potential.
Demographic and socio-economic factors: The per capita spend on medical expenses is still significantly lower than most other economies. Inequitable distribution of healthcare for rural population remains a major concern.
Regulatory hardships and deficiencies: The lack of an independent regulatory body to oversee industry specific requirements has resulted in inadequate regulations/policies and their enforcement. Weak IPR protection dissuading MNC investments, inferior quality leading to low reliability are some of the many key concerns.
Poor adoption: Demand for medical devices is significantly low in Tier-II/ III cities and rural areas. As identified in the WHO Priority Medical Devices Project, poor adoption is a result of four ‘A’ Barriers – Affordability, Accessibility, Appropriateness, and Awareness.
| High Potential | |
| Product | Unique Value Proposition |
| Affordable glucometer | Affordable and simple to use glucometer |
| Mobility assistance for stroke patients | Battery operated wearable, robotic rehabilitation tool enabling stroke patients to regain impaired leg mobility |
| Human body powered batteries | Hand-held electronic harvests energy from body movements to run devices like insulin pumps to run on nano-generators |
| Portable ultra-sound machine | Reduces overall cost of diagnostics increasing affordability |
| Phone offering a built-in ECG monitor | Smart phones with ECG monitor which can send regular feed to care giver |
Optimism
Most of the impediments are expected to be overcome in the medium to long term as the market matures and the inherent dynamics change. Success of the medical devices industry is closely linked to demand drivers such as improvements in the demographic and socio-economic condition of the population, and supply side enablers such as affordability, reliability and accessibility of quality healthcare. Some of the key factors are as follows:
Increasing awareness and income base: Rising income base, growing health awareness and reduced accessibility barriers are aiding market growth. Moreover, ageing population, with number of people in the 60-plus age group expected to go up from 89 million in 2009 to 316 million by 2050 is also a major demand driver.
Changing disease profile: Alarming increase of lifestyle and non-communicable diseases like cardiovascular diseases, obesity and diabetes, has resulted in a significant public health problem. Increased awareness has driven the usage of devices for effective screening and long term disease management
Manufacturing and resource prudent innovation: A large number of Indian scientists and entrepreneurs are developing products that are cost effective and suited for the unique market needs. Realising the high growth potential, MNCs also continue to invest in innovative solutions
Foreign investment: The total FDI investments made in the medical and surgical appliances in India have amounted to $115.3 million between August 1991 and April 2007. FDI is expected to spur R&D and manufacturing innovations, in turn increasing the efficiency and effectiveness of the medical devices
Emerging trends: Growth in medical tourism, increased wellness and prevention, improved infrastructure, developments in outpatient care and telemedicine, are some of the other factors which have increased interest and consumption levels of medical devices.
Despite the challenges, companies are shifting their focus towards developing innovative products to cater to the unmet needs of Indian domestic market. In addition to their emphasis on localised innovation, they are building and retaining their customer base by offering efficient post sales services. Some examples of innovative low-cost customised products in the market are given in the table.
In spite of the challenges, the future of Indian medical devices industry looks promising. Some such indicators are as follows:
- Convergence of drugs, devices, and diagnostics is expected to introduce new technologies and products that could eventually replace traditional medical methods
- Demand for health care products which can be self-administered or administered with limited assistance in a home set-up
- Emergence of R&D practices with focus on disease specific research
- Evolution of technology leading to reduced detection time
- Innovation commitments to meet market demand by delivering quality products at affordable price ranges
- Initiatives from the government to alleviate the condition with regulatory norms that increase capital inflow, protect IPR, incentivise manufacturers and, increase health education/awareness of the masses.