Ashok Patel, CEO and Founder, Max Ventilator explains talks about self-reliance in medtech sector in India
Even as experts continue to debate and speculate over the eventuality of a third COVID wave, its intensity and probable new symptoms and new strains, the need to attain self-reliance will remain a watchword of India’s health governance. And fostering and development of an indigenous world-class medical device industry will be an integral part of that self-reliance drive. What is the current status of the industry and what can be done more in terms of policy and other ways to steer it into a direction and path of self-reliance?
The prevailing medical devices landscape
The fourth largest market for medical devices in Asia, as of 2021, India is an $ 11 billion market. With a projected CAGR of 37 per cent in the coming future, the industry is expected to reach a market size of $ 50 billion by 2025.[1] Currently, there are nearly 750-800 domestic manufacturers in India, with an average investment of $ 2.3-2.7 million and an average turnover of $ 6.2-6.9 million.[2] At the same time, there are over 6000 startups. Some of the key states that serve as medical device manufacturing hubs include Gujarat, Maharashtra, Karnataka, Haryana, Andhra Pradesh, Telangana and Tamil Nadu. Yet, India imports nearly 80 per cent of its medical devices. For its part, the government has ensured that a favourable policy climate exists for investment from outside. With 100 per cent FDI being allowed under the automatic route for both greenfield and brownfield establishments, until June 2021, the country has notched up investments worth $ 2.23 billion. Notably, between financial year 2019 and 2020, the investment had almost doubled Y-o-Y to over $ 301 million.[3] At the same time, the US, Germany, China, Brazil and Iran have been key importers of Indian medical devices.
Where the industry falls short: domestic manufacturers catching up, yet patchy
Notwithstanding the impressive numbers, besides the fact that the country is dependent on nearly 80 per cent of its needs on imports, its domestic manufacturers are mainly focused on relatively low-end products such as consumables, surgical, cardiac stents and implants and general medical devices. The high-end technology products are mainly dominated by foreign players either through investments or the export route. In fact, electronics and equipment constitute a sizeable 56 per cent of the country’s medical devices imports. However, COVID-19 has definitely given an impetus to a flourishing diagnostics and imaging sector with over 2500 labs now conducting advanced molecular tests such as RT-PCR tests. In addition, domestic manufacturers are also coming up with upgraded implants and prosthetics technologies, technologically-advanced life support systems such as ventilators, automated external defibrillators (AEDs) and oxygen concentrators besides an array of modern automated and precision surgical tools and systems for different conditions. Yet, these recent developments are few and far between on a national level.
Regulations afoot to push the industry for quality and competitiveness
For its part, the government has in recent years attempted to streamline the regulatory framework for the industry with a series of rules and guidelines. The Medical Devices Rules 2017 had prescribed for a four-fold risk-based classification system covering all medical devices and equipment. Then the Medical Devices (Amendment) Rules 2020 has provided for a separate regulatory framework for medical devices divorced from drugs while also mandating companies to compulsorily register on a government-designated portal and acquire license for operations. Stipulating ISO 13485 as a pre-condition for registration would ensure that domestic manufacturers can compete in the world market and would be treated on equal terms with leading global companies.
Governments’ initiatives on medical device parks and PLIs
Along with regulatory initiatives, the central government and states have also attempted to give an impetus to domestic manufacturing by way of setting up of clusters and medical device parks within the country as also through production linked incentives (PLIs). Already, state governments of Himachal Pradesh, Tamil Nadu, Madhya Pradesh and Uttar Pradesh have given “in-principle” approval to develop medical devices parks. So, while Gautam Budh Nagar, Noida, is expected to have Northern India’s first medical tools and system manufacturing park by 2022, the Punjab government has also announced a medical device park at Rajpura.[4] Furthermore, the government has also announced a PLI scheme for making medical devices in four segments that includes devices for cancer care, radiology and imaging, anaesthetics and cardio-respiratory devices and all implants including implantable electronic devices. The scheme is to extend incentive at the rate of 5 per cent of incremental sales to eligible applicants.
What more can be done
So, while these have been commendable steps, there is a lot more that needs to be done to enable the emergence and indeed flourishing of an international quality and globally competitive domestic medical device industry.
- Motivate buyers (hospitals) to buy genuine Make in India medtech devices. Offer rebate on purchase and Provisions for higher depreciation Indian medical device purchase.
- Additional incentive for R&D expenses to be invested to the current scheme, requires fulfillment of complex procedure of defining the manufacturing industry. Bank can be made responsible to recognise award and the status of R&D house. Using this can endorse the existence of R&D activities. Local industry association can endorse the existence
- Educational Institution can get associated with medical device industries by adding subjects on Medical Devices daily studies. Full time involvement of students with industrial activities in R&D. The current allocation of time is very much insufficient (current allocation by most of the University is One semester, half/one day per week)
- Support from local education institutions for educating industry and their representatives in to exposure to new technologies, process of device certification, applicability of product standards, interpretation of product standards, implementation of requirements of product standards, guidelines for testing.
- BIS and OCI to allow easy access to all the required standards
- ERTL, E2DC, DRDO, provide guidance in finding applicable standards for particular medical device as and when requested by industry.
- Simple process of filing patents, registration of designs, copy rights (… within… Indian territory)
- Concessional Inclusion from labor laws, factory act, employment law for R&D employees and man power. So that industry can grow at faster pace.
- Allow medical device industry to execute legal contract for minimum service duration.
- Faster and shorter reverts for legal actions, structural roles and punishments for Protection of IP rights and theft of intellectual property.
- Product imported under CKD or knockdown condition that is reassembled and re-label in India should be discouraged. So, with these steps, the Indian medical device sector can not only truly become self-reliant but also go a long way in contributing to quality healthcare for Indians in India!
References:
[1] https://www.investindia.gov.in/sector/medical-devices
[2] https://www.investindia.gov.in/sector/medical-devices
[3] https://www.ibef.org/industry/medical-devices.aspx
[4] https://www.ibef.org/industry/medical-devices.aspx