Local R&D & manufacturing, incentives critical to expansion of Indian MedTech sector

New Delhi: “India is proverbial talent that will prosper in the future. India today is less than 1.5% of global medtech consumption but it is approximately 17% of the population. When global medtech companies look at India, it is attractive because it is a place where medical devices can play a role in healthcare delivery. But because India is mostly out of pocket, that is where not attractive from a multinational medtech company view. Investors in healthcare do not distinguish between return on investment. Meaning, expectations for profit companies are there in every fields. So India is talented, someday when we crack this problem, it will be a great place serve the patient as well as have industry,” opines Pavan Kumar Mocherla, MD India and South Asia, BD.

Mocherla says his company has invested in India significantly for past 30 years and directly employs over 500 people and many more indirectly.

“We have 2 R&D centers in India. In fact our entire IT backbone is managed by Indian companies – both for software as well as hardware,” emphasizes Mocherla who spoke at the panel discussion on MedTech and HealthTech: challenges and strategic opportunities at the sidelines of BioAsia 2022.

“When you look at pricing, India’s healthcare delivery is on the lower end. Procedure costs are among the lowest in India. Definitely an advantage for attracting medical tourism. But if you keep the price levels too low, it will lead to rampant reuse of products, which is a sensitive topic. So, I think trade margin rationalization is important. Pricing has to be viable, otherwise we will not get the right investment. We have potential in India, but we also have to make the viability of the market as an important factor so we get prioritized,” says Madan R Krishnan, VP & MD, Indian Sub-Continent (South Asia), Medtronic.

Krishnan adds: “There is a crore capability of India right now in terms of brain power, with the highest number of STEM, English speaking graduates. We’ve set up our largest R&D center in Hyderabad, India – outside the US. So there is a lot of credibility built by the center. Once you establish that credibility, more investments will come in.”

Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD) provides a peek into how Indian industry displayed resilience: “Right in April 2020, we realized that there would be a need for syringes to vaccinate. There are very few prequalifies suppliers for syringes of vaccines. And we knew that it would take a few years’ time to ramp up their capacities. So we shifted our capacity from disposable syringes to auto-disabled syringes. The flexibility of our technology allowed us to ramp up from 500 million to 800 million syringes per year in 2020.”

“The challenge for Indian manufacturers have been these custom duties which came around and the GST made it worse. This made viability in manufacturing very limited. Indian manufacturers started importing under the brand name and marketed it instead of making the product. Secondly, the consumers need to be protected. We need to be see what is the rational margin for the importer, distributer, reseller, for the hospital, and club it all together. It is still better than the 10x that is prevalent now,” adds Nath while pointing out the roadblocks.

Sharing his thoughts on the regulatory approaches evolving for the medtech sector, Bhargav Kotadia, MD, Sahajanand Medical Technologies says: “On the COVID front, we saw some of the best Indian talent but unfortunately some of our weaknesses got highlighted as well. The best in terms of collaborations between companies to get treatments to the patients in time. The weakness includes not knowing what to do with the devices we came out with. Not having a separate regulatory body for medtech in the country, at a time of crisis, there was complete chaos in terms of who manufactures and commercializes these devices.”

Kotadia adds, “Absolutely there is an unfortunate perception that life saving devices cannot be made in India. Over the years, when there is a negative bias against you, the best way to overturn that is through the product itself. So as a company, we have been investing very aggressively in our R&D and our products, which speak for themselves.”

Wee Yao Ng, Director, Intercontinental Strategy, Edwards Lifesciences mentions, “I learnt that we have a diversified gene pool in India. That offers very unique opportunities in investments. There is no lacking of brain power in India. We also have R&D and manpower investments in India. However, the medtech market in India is 1-2% of the global market. I look at it, not in a negative light, but as an opportunity in what it can be. The Indian pharma market is 14% so there’s no reason to not believe that one day, the Indian medical devices market can reach that.”

What is the way forward

“Lets focus on getting our disease solved rather than addressing the symptoms. From the healthcare access perspective – how do we ensure that our patients have the same access to techs and outcomes as the rest of the world,” says Mocherla.

Krishnan adds: “Publishing some metrics on how we are utilizing the assets we have, transparently, on the kind of progress we are making. That will take us onto a virtuous path. But I’m happy at the collaborations’ between medtech, pharma and govt during the pandemic. I’m optimistic for the future.”

As per Kotadia, access to healthcare should be no. 1 priority to the govt, that will automatically answer several other problems in the country.

Rajiv Nath believes that manufacturing has to be made attractive in the country so as to make the correction.

Let’s continue to build on the tremendous potential that India has – both as a consumer and supplier, mentions Wee Yao Ng.