Let’s start off by understanding the current healthcare sector in India that runs in a paradoxical environment. On one hand we have healthcare centres that boast of high-tech facilities, medical tourism and specialised care and on the other hand, the country battles with the affordability and accessibility factor. In such circumstances, adding infrastructure, and generating employment for medical professionals alone will not serve the purpose. The system needs to be backed by medical technology that will be instrumental in ushering a new age of medicine and caregiving.
Role of medical technology
Medical technology plays a vital role in the healthcare scenario. The industry consists of the medical equipment, device and medical consumables’ market and accounts for around 8-10 per cent of the overall healthcare sector. The amalgamation of these three sectors is mainly responsible for facilitating clinical and administrative capabilities for global interface, better diagnosis, and care-giving. In the true sense, this sector serves as the backbone of the healthcare delivery sector. Currently, India’s medical technology market is ranked as the fourth largest market in Asia, after Japan, China and South Korea.
S Kalyanaraman General. Manager (Group Mktg. & Corp. Communication) Trivitron Healthcare |
Speaking about the opportunities in India for this sector, S Kalyanaraman, GM-Group Marketing and Corp Communication of Trivitron Healthcare, states that India is one of the world’s most lucrative healthcare markets, and is expanding rapidly, according to latest findings by a report published in February 2012, by market research firm RNCOS. Referring to a report titled ‘Indian Healthcare – New Avenues for Growth’ published by the RNCOS, Kalyanaraman mentions that India is the most competitive destination with advantages of lower cost and sophisticated treatments. He fills in saying that the medical and surgical appliances industry registered FDI worth $514.08 million. Further, he feels that medical devices has been one area that is thriving in India. “Medical device sector is around nine per cent of Indian healthcare industry. (Source: Hospital Market – India by Research on India, Aranca Research, IBEF)”, he informs. However, on the global front, this sector ranks low in comparison to the rest of the world. Reasons being, lack of an ecosystem specific to medical technology industry, unaffordability, inconsistent access patterns, lack of clear regulatory policies, lack of government support for indigenisation of medical technology manufacturing and innovation, etc.
Ratan Jalan Founder & Principal Consultant, Medium Healthcare Consulting |
“The challenges in the Indian market are manifold. Unfriendly regulatory environments make it difficult to manufacture devices domestically, due to tariffs on the importation of raw materials, and the complicated, lengthy approval process for any finished product. Domestic production is an important element of the strategy to bring down the costs of devices in a significant manner,” reveals Ratan Jalan, Founder and Principal Consultant, Medium Healthcare Consulting.
Jayant Singh Asso. Director, Healthcare Practice, Frost & Sullivan, South Asia & Middle East , Frost & Sullivan |
Jayant Singh, Associate Director, Healthcare Practice, Frost & Sullivan, South Asia & Middle East, specifies that compared to income levels, the cost of medical technology in India is very high and affordability is the one of the biggest hitches. “India is the diabetic capital of the world. Nearly 55-60 million people in India live with diabetes, so logically these people should use blood glucose monitors on regular basis to keep a check on their sugar level. However, few people can really afford it and even fewer can afford to use it regularly”, he alludes.
Furthering on the same, Jalan informs that 75 per cent of medical devices are imported to India; of which 30 per cent are imported from the US alone. ”Even if a foreign manufacturer sets up shop in India to lower costs, they are still not able to reduce prices enough to bring their products within reach of the vast majority. Devices from Indian manufacturers cost 5-15 per cent of US prices for almost comparable devices; a perfect example could be the intraocular lens (IOLs) manufactured by Auro Labs. In other markets, insurance eases this issue but penetration in India is still very low. We have witnessed that some of the government insurance schemes have helped broaden the market for some of the devices. However, lack of awareness is another factor, which results in under-diagnosis and under-treatment particularly for chronic care,” he reckons.
Manoj Gopalakrishna Managing Director, BD India |
Manoj Gopalakrishna, MD, BD India adds, “As India looks forward to invest in its health systems to extend health services access to more people, we believe that programme- based collaborative approaches will enable the health system strengthen its position in India and create a sustainable business impact. The government, industry, academia, healthcare providers should collectively take necessary steps to bring about a change. Moreover, the medical devices sector requires a regulatory framework that will accelerate innovation and indigenous manufacturing, thereby helping bring down the cost of healthcare delivery to the patient.” With all this in mind, it won’t be a spurious claim if it is said that here innovation will be the vanguard.
A fair shake for India
Innovation drives change. It enhances productivity and improves the quality of life. Moreover, in the healthcare scenario, innovation plays a vital role in doctoring medical practice. “Bringing innovation across the entire care pathway will be the key to growth in the Indian medical devices industry. Innovation that addresses issues as vital as product usage environment, patient awareness, physician adoption and affordability can catapult its penetration in the country,” claims Jalan.
Speaking about the opportunities in India, Kaustav Banerjee – Country Manager, India, St Jude Medical Devices predicts, “Innovation will drive the future of medical devices industry in India and emerging markets of the world. India will be one of the top five hubs of innovation, clinical research in the world.” Banerjee further pointed out that medical device innovation helps foster growth for the entire medical sector. With innovative new technologies there is better disease management, increased safety and reduced procedural risks for patients, as well as a diminished burden on healthcare costs.
Impact of innovation in medical technology
Globally, the medical technology industry has been thriving on innovations. Be it medications, diagnostics methods and equipment or therapy and procedures; innovation has continued to be a critical component of medical science. Various surveys have revealed that innovation has been one of the top priorities of CEOs and innovative companies. Where innovation in healthcare is concerned, Singh is of the opinion that innovation has caused a paradigm shift for disease management. Citing an example on how innovation improve disease management, Banerjee explains, “As more people are diagnosed with cardiovascular disease and healthcare costs escalate, it becomes increasingly important to find treatment options that can improve patient care in a cost effective manner. As an example, over the past few decades, the cardiology space has witnessed significant positive changes when it comes to introducing new technology. The space is consistently advancing and at St Jude Medical, we are doing our part to bring the latest technological advances to India. In the past year alone, we have introduced important tools to help cardiologists improve care, including the launch of the latest generation of optical coherence tomography (OCT) technology, which aids physicians in visualising inside blood vessels.”
Innovation and India
Though the positive impact of innovation in medical technology is admirable, can this balance costs, enhance healthcare quality and address the challenges of the industry? Is there enough innovation to be found in our Indian medical technology sector?
On this, industry experts assert that innovation in India is still in its infancy. While medical technology companies are burdened by all the constraints surrounding the industry, what Indian medical companies do is a kind of ‘jugaad’ in order to provide quality healthcare and when it comes to medical technology innovations from India we have few examples to draw inferences from.
“Innovation indeed flows from the West to us. However, there are companies such as GE, Philips, Perfint Healthcare, Bigtec Lab, Xycton Diagnostic and a few more who are doing their bit by incorporating innovation in their products. The innovation is either in terms of significant lowering of costs or altogether new technologies at a very low cost,” Singh informs.
Jalan chips in saying, “In the ophthalmic segment, Aravind Eye Care and Auro Lab are perfect examples of how to make cataract implantation affordable via product, pricing, process and outreach innovation, yet remain profitable. Auro Lab manufactures IOLs at one hundredth the cost of its western counterpart Alcon. The pricing combined with the outreach strategy and process standardisation has made the treatment affordable, even for people at the bottom of the pyramid. Similar innovation can be found in the pre-screening ophthalmic device developed by Forus Healthcare, an IDG Ventures promoted company in India. With a single, portable, non-invasive and low cost device for detecting ailments such as diabetic retinopathy, cataract, glaucoma and few others, they have drastically reduced the effort of identifying patients who need the therapy.”
Additionally, he says, “Perfint Healthcare, a Chennai-headquartered small medical devices firm, has already set ambitions to become a global leader in the interventional oncology segment. It has already made waves as an excellent tool for performing image-guided biopsies, with an extraordinary precision of 100 microns and .1 degree, unfound elsewhere. As market for guided procedures for early stage cancer diagnosis, drug delivery etc, are estimated to grow to about 50-60 per cent, it presents a huge opportunity for such devices.
Diagnosing anaemia has long been a national issue, since it is related with thousands of pregnant deaths. This was primarily because of the unavailability of a rapid point of care diagnosis tool, which can even be used in the rural settings without the aid of electricity or any professional skill set. Biosense, a venture founded by IIM and IIT graduates, addressed this problem with a simple-to-use, portable device that can detect anemia without even pricking for blood. This again helped in acceptance of the device among rural women who are averse to pricking because of social taboo.”
What India needs?
It is an almost unanimous opinion that only the innovation route can take Indian healthcare towards progress. Nevertheless, for any innovation to succeed a right technique is must. “Innovations need to be designed keeping in mind the needs of the people in India; especially the need for unequal access to healthcare and lack of specialists in the country. Innovators needs to strive a balance between cost and quality,” explains Singh.
A new concept called frugal innovation is something that most medical technology manufacturers are embracing off late. In the medical technology field this approach is adopted by companies such as GE and Sonosite. They have developed handheld mobile ultrasound and electrocardiogram (ECG) scanners for use in regions where health clinics are few and far between, but the needs of the people are just as great as those of city dwellers. These again are excellent citations of the kind of innovation that India needs. But how do medical technology companies ensure a consistent way of thinking out-of-the-box to make sure that they achieve the benefits needed for Indian healthcare?
Well, innovation needs to be a continous process, and this is where India lags. What it needs is a systematic focus on product and services as well as value that eliminate the cost component. Kalyanaraman suggests that it would be useful to think of effective strategies along two dimensions: product/services and business model. “Companies address the market with varying combinations of products/services and business models: opportunistic, customising, or innovating. Companies may operate at different points on the continuum for different product lines, so the level of innovation required should match the priorities of the chosen market segment and the degree of differentiation required. The structure of local operations in India will depend on the company’s internal capabilities, investment and risk appetite, the availability of specialised services, and intellectual property risks.”
Innovation will continue to be the driving force for the upliftment of the Indian medical technology sector and the entire healthcare delivery system at large. The good thing is that India does not fall short of clever ideas. All in all, for those who seek to drive this change, should fecilitate it by furthering evidence-based thinking with their new age products and services.