With the adoption of technologies, India’s medtech market has evolved to provide quality medical services to patients. However, there are still some unexplored challenges and areas that need attention
The Indian medical devices sector was recognised as a sunrise sector by the Government of India as part of Make in India campaign in 2014. Since then, the industry has evolved in terms of deepening its prowess in the value chain across device-segments ranging from low-tech segment like consumables to the more sophisticated ones like diagnostic devices, high- end surgical equipment, etc.
With technological advancements, the role of medical devices is now expanding to improve quality of care across each stage of the healthcare continuum. The healthcare industry in general has witnessed various revolutionary changes like elevated use of technology adoption. At the beginning of the pandemic, India’s medtech sector had a bigger responsibility as it was faced with multiple challenges like fast-track availability, manufacturing and access of products, majorly due to dependence on other supply chains and disruption of supply and demand systems. The challenges are still not over but opportunities created in the form of the call for ‘Aatmanirbhar’ or self-reliance’ during the pandemic is the brighter side.
Medical technology industry in India: Market scenario
The Indian medical devices sector presents an unprecedented growth opportunity backed by inherent growth in demand arising from increasing healthcare needs along with government’s commitment towards providing an enabling policy-environment for domestic manufacturing. The pandemic has forced global companies to explore alternative sourcing to de-risk their supply chains and India has the potential to be a preferred destination for global manufacturing.
Talking about the medtech market in India, Vijay Chawla, Partner & Head- Risk Advisory and Head -Life Sciences, KPMG in India said, “InvestIndia estimates the medical technology (medtech) sector in India is currently valued at Rs 11 billion and is estimated to reach Rs 50 billion by 2025, at a CAGR of approximately 37 per cent. With the advent of relevant technologies, the market has evolved to provide top quality medical services to patients at affordable prices. The ongoing pandemic has fueled demand for high quality, low-cost medical technology, and devices. In addition, a key driver in this sector is the favourable regulatory and policy environment created by the government. With the launch of various PLI-type schemes for medical parks, the government has been proactively taking steps to attract investments from MNCs and private players for setting up innovation and manufacturing base in India.”
A recent KPMG-APACMed report highlighted that the Indian medical devices industry is expected to grow at a CAGR of 15 per cent which is 2.5x the global growth rate. India is among the top 20 medical device markets and is the fourth largest medical device market in Asia after Japan, China, and South Korea. The medical devices sector in India has the potential to grow approximately 4x the current market size by FY30, backed by growing healthcare needs and government’s commitment to facilitate growth.
Falgun Jani, Head of Sales, Freudenberg Medical India said, “India climbed to the 63rd rank among 190 countries in the World Bank’s ‘Ease of Doing Business rankings in 2020. The Indian Government has undertaken structural and sustained reforms to strengthen the healthcare sector and has also announced conducive policies for encouraging FDI. The Aatmanirbhar Bharat Abhiyaan packages include several short-term and longer-term measures for the health system, including Production-Linked Incentive (PLI) schemes for boosting domestic manufacturing of pharmaceuticals and medical devices.
Key segments of medical devices sector in India
The Indian medical devices sector is broadly classified into five segments:
Electronics equipment, surgical instruments: As per KPMG-APACMed report, these segments together account for the highest imports in the medical devices sector. These include high-end technology devices such as MRI machines, CT scanners, ultrasound machines, X-ray machines, cancer diagnostics, dental drills, minimally invasive surgical devices, Polymerase Chain Reaction (PCR) technologies, etc. Manufacturing of these devices involves complex electro-mechanical assemblies requiring manufacturing technologies like PCBs, controllers, sensors, embedded software, electro- physics, electromagnetics, laser-cutting, etc
Consumables and disposables: Products in this segment include bandages and dressings, suturing material, syringes, disposable catheter cables, gloves, blood bags, etc. These devices can be manufactured using simpler processes like moulding, extrusion, polishing/coating, simple mechanical assemblies, sterilisation, etc. The market in this segment is highly competitive due to low entry barriers. This segment is a top exporting segment accounting for 51 per cent of the total exports of medical devices from India in FY 2021.
Implants: Products in this segment include knee and hip implants, artificial joints, dental fixtures. This segment largely comprises of high-risk devices.
Antony Prashant, Partner, Deloitte Touche Tohmatsu India highlights that, “The medical technology market in India is broadly segmented into instruments and appliances, diagnostic imaging, consumables and implants, and patient aids and other technologies. Instruments and appliances segment dominated the medical technology market followed by diagnostic imaging, patient aids and other products, and lastly consumables and implants segment. Of these the patient aids and other products segment and consumables and implants segment are expected to grow the fastest in the coming years. The epidemiological transition from communicable to non-communicable diseases, better affordability, increasing geriatric population, and an overall improvement in healthcare infrastructure are driving the growth of the sector. However, production capabilities are at a very nascent phase, with very little production done within the country – domestic production is limited mostly to consumables. Also, the domestic market is fragmented and has a complex regulatory structure.”
IVD: Products in this segment include IVD reagents / chemicals, calibrator, control material kit, etc.
Stressing on the IVD market, Jatin Mahajan, MD, J Mitra & Co said, “India’s IVD story exemplifies leadership and planning at several diagnostics and policy ecosystem levels. The Indian IVD industry quickly rose to the occasion during the corona pandemic. Driven by our extensive R&D, we were quick to develop highly potent test solutions across numerous technologies. This fast and effective action slowed the spread of COVID-19 in India. The large-scale point-of-care (POC) COVID-19 testing added USD 9,000 million to the IVD market’s value. Aspects like syringes, surgical gloves, masks, oxygen concentrators, and ventilators registered a multi-fold growth, decreasing and completely wiping out their dependency on foreign players.”
“India holds remarkable potential in the global IVD market and is considered the international centre for frugal medical device engineering. Moreover, India is among the leading exporters of IVD solutions worldwide. The opportunities, therefore, in this segment are tremendous”, he added.
The device market is highly import-dependent. As per EMIS data, imports constitute approximately 70-80 per cent of the market. Import-dependence is higher in high-end sophisticated device-segments. Domestic manufacturing is largely focused on low cost- high volume segment (like consumables and disposables).
Big data, wearable devices and robotic surgeries are the fastest growing segments globally. Experts believe that these evolving industry trends will be playing a major role in the overall growth of the market.
Vinay K Mayer, Director, Market Research & Consulting, Asia Research Partners highlights that, “One of the fastest-growing segments is the development of artificial intelligence (AI) and machine learning (ML). There are many different types of medical technologies that are benefiting from this growth, including medical imaging and diagnostic equipment, healthcare software and services, telemedicine and remote patient monitoring, and mobile health applications. These technologies are helping doctors to diagnose and treat patients more accurately and quickly. They are also helping to develop new treatments and cures for diseases. In addition, the growth of healthcare data collection and analytics is another major reason for the success of the med-tech industry. By understanding how data can be used to improve patient care, medical professionals can provide better care for their patients.”
Chawla explains that, “The wearables space includes devices such as smart watches and trackers that monitor heart rate, oxygen levels, exercise etc. The pandemic has convinced many individuals to track their health, fitness and immunity. This, coupled with the devices’ ease of use, has led to wearables becoming pervasive in people’s lives. Robotics is another space which is rapidly evolving and growing in popularity. Innovations in this space are and will continue to enable an increased adoption of a range of robotics-enabled techniques and devices. These range from robot companions to exoskeletons. Such solutions have the potential to drastically improve accuracy rates, recovery times, and surgery outcomes. Robot companions will also see a rise in popularity in the medical sphere as they can aid in treating mental health issues, alleviating patients’ loneliness and helping children cope with chronic illnesses.”
“A shortage of hospital beds and medical devices during the pandemic led to an increase in demand for home healthcare. The home healthcare space is expected to grow to USD 21.3 billion by 2027, at a CAGR of 19.2 per cent as more people try and avail healthcare and medtech services from the comfort of their homes,” he added.
Prashant adds, “Implanted medical devices and wearable external medical devices were the fastest growing segments globally. Improved connectivity, development of smart sensors and materials, and advances in technologies such as additive manufacturing, robotics, and digital imaging are driving the growth in medtech.”
Medical devices generate huge amounts of essential, timely data that can have significant clinical impact. Predictive analytics models using ‘Big Data’ can improve the quality of care and patient outcomes, as well as help physicians gain useful insights. Wearables such as glucose monitors, exercise trackers, and wearables for mental health becoming popular among consumers in India because of their ease of usage. One of the most exciting and fastest growing fields of healthcare is robotics wherein future developments range from robot companions to exoskeletons. Robot companions also have their place in healthcare to help alleviate loneliness, treat mental health issues or even help children with chronic illness.
Need of the hour
As far as overall growth of the medtech sector is concerned, the Government of India’s strategies and policies for business continuity and sectoral revival are already in place. The schemes and regulations allowing 100 per cent FDI aiming at global investors to choose India as their preferred destination for investments are driving the sector. This is also important as there is increased demand for technologically advanced, high-quality, low-cost medical devices that are accessible to the Indian population. These factors are also attracting international companies to set up production facilities in India. However, there are still some unexplored challenges and areas that need attention.
The segment-wise development of the medtech sector also needs adaption of new strategies and measures being drafted and implemented by various stakeholders.
Ashok Patel, CEO, Max Ventilator believes value-based healthcare to be the pressing need to reform the sector. He says that, “The spiralling cost of availing medical care and divergence of outcomes across the health system have made value-based healthcare a pressing need to reform the sector. Under this approach, emphasis is given to measuring the outcome of medical treatment and expenses accrued thereof based on the ailment, risk group and the development of customised interventions. It can be seen as a monetary incentive to drive healthcare professionals to meet certain performance assessments to process quality and efficiency. Also, it chastises healthcare providers in case of any error.”
With this model of healthcare, patients spend less to get better care. It is beneficial for those suffering from chronic diseases such as cancer, hypertension, diabetes or obesity. The patients get better quickly with fewer doctor’s visits, medicines, tests or surgeries. For the caregivers too, this approach allows one to concentrate more on developing novel prevention-based services and spend less time on managing chronic diseases or conditions. The quality of services too increases leading to greater patient satisfaction.
“Technology plays a significant part in this seismic shift towards value-based care since standardising and reporting patient outcomes and the quality of care needs a huge amount of health data and its analysis, diversely engaging patients. More and more patients now want to book appointments online and access their medical records instantly through the click of a button. In this current scenario, those who provide quality and convenience – the basis of value-based healthcare- are poised to succeed more. While many medical technology CEOs have been embracing this model of providing services, many others remain skeptical over the fear of disrupting the conventional way of doing business. But that hesitation must be brought to nought. Companies must exploit the possibilities that this new value-based approach to healthcare provides”, Patel added.
Mayer suggest that, “End users, including patients and healthcare providers, need easy access to affordable therapies and devices. They also need reliable information about products and their potential risks. Producers of healthcare products and services must cooperate with scientific societies, research institutions, and other stakeholders to develop knowledge about new therapies and devices. Also, in terms of stakeholder engagement, all stakeholders should be involved in the development of policies that affect them. This includes engaging with regulators, industry representatives, patient groups, health insurers, doctors, nurses, technicians, etc”
Prashant says, “Government of India has already undertaken multiple initiatives to support the sector in terms of 100 per cent FDI for medical devices, PLI scheme, and medical parks. This would need to be sustained, and further encouraged, given that medtech industry is capital intensive with a high gestation period for investment. A supportive regulatory framework and being able to attract foreign investments will help shape the domestic market. Meanwhile med tech companies would need to focus on dimensions such as interoperability, cybersecurity, navigating regulatory changes, and attracting digital talent and building digital capability, and ensuring strong privacy and security arrangement, for the industry to scale-up.”
Solving these challenges, aided by PLI schemes, timely policy interventions and industry-government cooperation, will smoothen out the growth path of the Indian medtech sector as it evolves to meet patient needs.