Sushil Suri, Chairman & MD, Morepen Labs in an interaction with Kalyani Sharma talks about his company’s future plans, factors driving the growth of medical devices industry in India and more
Could you share the major factors driving the growth of medical devices industry over the past few years?
The medical devices market is indeed growing rapidly. The entire diagnostics industry is expanding, particularly in the home medical devices segment. Twenty years ago, this market hardly existed in India. Most devices were imported through unorganised channels , with no authenticity or after-sales service, and there was a lack of regulatory guidance. Today, the situation is much better, with devices like blood pressure monitors and glucometers and all other self-test devices readily available at neighbourhood pharmacies.
One of the key reasons for this market expansion is the growing awareness about health. With campaigns and media attention, people are more aware of health risks like diabetes, and they’re taking preventive measures. COVID has indeed heightened awareness, with people more willing to invest in their health. Disposable income is higher, and mindsets have changed. What was once considered a luxury is now a necessity. If people are willing to spend on lifestyle luxuries like dining out or ordering food, they are also ready to spend on their health. This shift in mindset has been a significant growth driver for the industry and for us.
The second reason is availability—companies like us have expanded distribution channels to ensure these devices are easily accessible and can have after sales service; this is a service oriented business.
Lastly, affordability has played a crucial role. Prices for devices like BP monitors and glucometers have reduced significantly, making them more accessible to the average consumer. We have worked on backward integration and reduced manufacturing costs, which has helped lower the prices. Initially, BP cost around Rs 5,000, which was considered a luxury. We’ve brought that down to around Rs 1,000, making it more affordable for households. You can buy a glucometer at less the cost of branded coffee. While we started with few thousand meters every month, today we sell over two lakh glucometers per month, and the demand continues to grow.
How has the ‘Make in India’ initiative influenced the medical devices sector?
The ‘Make in India’ policy has been a crucial step in reducing dependence on imports, particularly from China. Initially, the industry faced challenges due to the lack of local suppliers. However, the push for domestic manufacturing has encouraged companies like ours to invest in backward integration and build our production capabilities in India. Today, we are well-positioned to manufacture for both India and global markets, thanks to the vision of ‘Make in India for the world.’ At Morepen, we have gone for 100 per cent backward integration and are manufacturing all medical devices from bare PCBs and have installed highly sophisticated, fully automatic robotic machines for high speed, high precision manufacturing.
Which key medical devices are contributing the most to Morepen’s growth, and are there any upcoming innovations in this space?
Yes, glucometers are our flagship product, contributing to about 70 per cent of our revenue. We follow a business model similar to the printer-cartridge model, where as a company’s pledge to encourage regular home testing of sugar levels at home, we sell the glucometers no-profit-no-loss and generate revenue and profit from regular use of the from the strips. We are also seeing good growth in other segments like blood pressure monitors, which is particularly important given India’s status as the cardiac capital of the world.
We are working on several new products, including portable nebulisers and more advanced glucometers. One of the innovations we are excited about is the Continuous Glucose Monitoring (CGM) system. Currently, these systems are quite expensive, but we aim to bring the cost down from Rs ,5000 to Rs 500 , making it accessible to a broader population.
When it comes to medical devices, the glucometer is our flagship product, or as we like to call it, our “hero product.” It contributes to about 70 per cent of our revenue. What’s interesting is that while we sell the meters at nearly break-even, we generate our profits from the sale of strips. For every glucometer sold, we sell around 150 strips annually—about three to four packs of strips per user. We provide the first 25 strips free to encourage the user to start the testing, and after that, when the customer returns to buy more, that’s when our business equation comes in. It’s essentially a business model similar to that of printer cartridges: you buy the printer, but you’ll need to keep purchasing cartridges to use it.
There’s a lot happening, particularly around glucometers. We have an annuity business model with them, but we’re also working on advancements like Continuous Glucose Monitoring (CGM). Currently, CGM is a high-end product, costing around Rs 5,000 for a patch. We want to bring that price down to Rs 500. Right now, it’s Rs 10,000 per month for a CGM, which is quite affordable in global markets like the U.S., but in India, Rs 10,000 a month is a lot of money for a salaried person. We’re working on making this much more affordable.
Another key product is the BP monitor for which the market for BP monitors is expanding rapidly. India, unfortunately, leads the world in cardiac deaths, and what’s more alarming is that cardiac issues are now affecting younger people. Earlier, it was mostly people over 50 or 60, but today, the average age for cardiac arrests is between 35 and 40. Stress and lifestyle changes are also contributing to an increase in diabetes, even among the younger population. This is why the market for these devices is expanding so fast.
In addition to glucometers and BP monitors, we have new products in the pipeline like nebulizers, weighing scales, and thermometers. We’re also working on portable nebulizers. But I would say 70-80 per cent of our business, if not more, still comes from glucometers and BP monitors.
How has your API business evolved, and what are the key growth drivers?
In the API sector, we focus on leadership in select products rather than spreading ourselves thin.
For instance, we are market leaders in six key products, including Loratadine, Desloratadine, and Montelukast. We hold a 60-70 per cent market share in these, with Loratadine at 70 per cent, Desloratadine at 60 per cent, and Montelukast at 50 per cent. This gives us global leadership in terms of product volume. We also have a 5-15 per cent market share in three other products—Atorvastatin, Rosuvastatin, and Fexofenadine—and we see significant opportunities for growth in these areas as well. We are expanding capacities and plan to further strengthen our leadership position.
In addition to these existing molecules, our second major growth driver will be new molecules. We have around 40 molecules that are still under patent, with many patents set to expire in the next 2-3 years. Once these patents expire, we expect our market share in these new molecules to rise from 10 per cent to 20 per cent, and eventually to 30 per cent over the next four years. This will result in higher revenues and better margins, as new molecules typically offer better profitability. We are well-prepared, with patents filed and a robust pipeline ready to be rolled out.
Another significant growth area for us is Contract Development and Manufacturing Organization (CDMO) services. As an API company, we already have the necessary infrastructure in place—manufacturing capabilities, testing facilities, research, and quality control. We can handle production scales ranging from 5 tons to 100 tons per annum. Smaller companies that only offer CDMO or CRO services typically operate on much smaller scales, with trial batches of 1-5 kg. When they need to scale up production, they turn to larger players like us. Over the past six months, we’ve seen CDMO business coming our way, and although we haven’t officially branded ourselves as a CDMO player yet, we’ve started building the team and engaging with customers.
In the next 2-3 years, we expect CDMO to become a key growth driver for our API business. We are also expanding our capacities in this area, ensuring that we can meet the growing demand.
What are your projections for revenue growth in both the medical devices and API segments over the next 2-3 years?
We expect the medical devices segment to grow by 25-27 per cent annually, while pharma will grow at 17-18 per cent. By 2028, we are targeting revenues of around Rs 3,000 crores. The long-term vision is clear: we aim to establish ourselves as a global manufacturing hub for medical devices and APIs, leveraging India’s growing presence in the global healthcare market.
The medical devices segment is growing much faster, with an annual growth rate projected at 25-27 per cent. On the other hand, the pharma sector is expected to grow at a steady pace of 17-18 per cent. When combined, we anticipate a blended growth rate of around 19-20 per cent, which should help us achieve a revenue target of Rs 3,000 crores by the fiscal year 2027-28.
Looking ahead, our long-term vision for the company is clear. We are determined to contribute to the opportunity and solidify India’s position as a manufacturing hub. We are focused on becoming the leader in medical devices within India and expanding our role globally. Additionally, we are committed to establishing ourselves as a key player in the global medical devices and API markets, with a strong emphasis on regulatory compliance.
We have received the “NIL-483” clearance from the FDA for three consecutive inspections. In the past 25 years, we have not faced any recalls, rejections, red alerts, or red flags—a rare achievement in the pharma industry.
What do you see as the biggest challenges for the industry moving forward?
The speed of innovation is both a challenge and an opportunity. Products are being copied quickly, which shortens the life cycle of any innovation. Additionally, talent remains a significant challenge. While India has developed infrastructure, we still lag in terms of selling skills and financial management expertise. But overall, the industry is poised for tremendous growth, and with the right strategies, we can overcome these challenges.
One of the biggest challenges today is innovation, specifically, the speed of innovation which is both a challenge and an opportunity. In the past, it could take 17 years to get a drug approved, which gave companies a long window of exclusivity under patent protection. Now, approvals come much faster, but that also means products are copied quickly, drastically shortening the lifespan of any innovation. Intellectual property (IP) protection has become more important than ever.
Additionally, talent remains a significant challenge. While India has developed infrastructure, we still lag in terms of selling skills and financial management expertise. But overall, the industry is poised for tremendous growth, and with the right strategies, we can overcome these challenges.
There was a time when infrastructure was a significant concern for us. Thankfully, we have made progress, and while the infrastructure may not be perfect, it’s sufficient, and the government is actively working to improve it. Policies have become somewhat more business-friendly, but there is still room for improvement, especially when it comes to talent development. Our workforce isn’t aligned with the rapid growth we are experiencing. It’s not that our talent is of low quality, but it has been shaped by a legacy of bureaucratic practices that were more about maintaining the status quo than fostering growth.
This talent hasn’t been fully prepared for the aggressive growth seen in sectors like startups. Often, we have to borrow ideas from abroad, but our local talent struggles to quickly adapt to this new way of thinking. This gap in talent can be addressed through collaborations, which we are already pursuing, especially on the technical side. However, when it comes to key skills like selling, India still has a lot of ground to cover.
We excel in manufacturing and building projects, but when it comes to selling, we fall short. This is one of the reasons why India has become known for producing generic products—because we don’t know how to effectively sell or market them. The selling techniques and talent required for global success are still lacking.
With markets opening up and opportunities expanding, India is in a much better financial position. There’s ample liquidity, equity is available, mutual funds are flush with cash, and the markets are booming.
A decade ago, India was heavily reliant on foreign institutional investors (FIs) for funding. Today, we are much more self-reliant and less dependent on external sources. The landscape has changed, and we are in a stronger position to capitalise on these opportunities.
What is your long-term vision for the healthcare industry?
If you look at your personal health expenditure over the past five years, it’s likely increased fivefold—easily. The same goes for the Government of India’s health budget, which has tripled in that time. Projections indicate that health spending is only going to grow further, becoming a significant part of the national budget.
Today, India’s per capita health expenditure has crossed $100, which is significant for a country like ours. This increase is reflected not only in government spending but also in the number of hospitals being built.
From a broader perspective, India’s healthcare story is becoming more defined as a manufacturing hub, with the “Make in India” initiative positioning us as a global player. Whether the current government continues or not, this trend is here to stay. India’s healthcare industry is still in its early stages, particularly in areas like health insurance, but it’s evolving rapidly, and the future looks promising.
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