Innovation Set To Drive Growth In the Medical Devices Market In 2020
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The Indian medical devices industry is a diverse space that has been ruled by giant multinationals operating through extensive service networks. Many of these devices—ranging from orthopaedic implants, artificial joints, stents, pacemakers and imaging equipment—are imported from the US, Germany, Singapore, China and Japan.
Growing at a CAGR of over 7 per cent, this $5.2 billion segment is projected to reach $50 billion in the next five years. Diagnostic equipment contributes to the major chunk of the global market share, while in India the biggest contribution comes from the equipment and instruments category (almost 35 per cent).
Innovation along with a steady growth rate of 15 per cent has catapulted India into the top 20 global medical devices market over the past decade. With the government allowing 100 per cent foreign direct investment, the past year saw many foreign players enter the Indian market under the automatic route bringing in technological innovation and setting up manufacturing units in the country. Now with impactful technologies and artificial intelligence bringing in a convergence across healthcare products and industry segments, the medical devices industry is set for some revolutionary changes in the next few years.
The emergence of startups and home-grown healthcare players working in this sector is expected to transform the way the industry operates and grows in the decade ahead.
Opportunities and Challenges
The millennial consumer is changing the dynamics of every industry. The medical devices industry too is touched by their voracious demand for quality healthcare. Some of the significant growth drivers include a rapidly ageing population with huge disposable incomes, an increasing burden of non-communicable diseases and the rise of the home healthcare sector. To meet this growing demand and make healthcare more affordable and accessible a large number of private players are entering into tie-ups with multispecialty hospitals, diagnostic centres and healthcare facilities.
However, this segment is highly fragmented and there is need for some strong regulatory restructuring by the government. Apart from a nascent regulatory environment, some of the other key challenges faced by the sector include low penetration, accessibility and affordability and lack of awareness. Recent policy changes by the government have brought some imported medical devices under the price capping. While currently only 24 items including cardiac stents, knee implants and condoms are regulated, inclusion of more devices would allow the National Pharmaceutical Pricing Authority (NPPA) to notify them as drugs, thereby bringing them under the price capping system.
Price Capping: A Boon For Start-Ups?
In 2014, the government of India capped the price of knee implants, bringing down average surgery costs by almost 65 per cent. In the same year, NPPA, the governing body for price control of pharmaceutical drugs in India, brought down the cost of stents by almost 85 per cent.
The government's proposal this year to regulate pricing of over 6,000 medical devices including glucometers, blood pressure monitors, hearing aids and pacemakers has been met with much speculation by industry experts. However, policymakers are of the opinion that this decision would not only enable us to exercise control over imported implants and devices but also make many medical procedures more affordable for the common man.
Currently, the MNCs are directly selling these devices to hospitals without a label of maximum retail price. The government, with this policy, aims to address the loopholes in our healthcare system that allows hospitals to bill patients exorbitantly for such procedures in the name of imported parts.
While there are more than 6,000 different types of medical devices used worldwide, only one-sixth of these are made in the country. By bringing more devices under the notification of the Drugs and Cosmetics Act of 1940, the government has not only ensured that only safe and tested equipment reaches consumers but has also given a great opportunity to Indian startups to show their mettle and contribute to the ‘Make In India’ campaign by indigenously developing revolutionary technologies.
Strengthening the Healthcare Ecosystem
Medical devices play a crucial role in improving screening, diagnosis and treatment of disease. Technologies such as minimally invasive surgeries have improved complexity and accuracy of medical procedures.
Advancement in surgical equipment has better equipped doctors to perform highly complicated surgeries and treat critical cases. Portable devices have helped improve diagnostics and point-of-care services at primary healthcare centres. They have also made quality healthcare delivery possible in underserved part of the country, thus enhancing accessibility and patient satisfaction. Procedures such as knee replacement, bariatric surgeries, vision correction and cataract surgeries have become more common owing to the widespread use of these technologies. Besides, assistive monitoring devices have taken patient care outside the hospital and made rehabilitation and recovery faster and more cost effective. However, even though manufacturers have been successful in improving quality of care and patient outcomes, these devices still remain largely expensive for most of the population.
Many startups have stepped up to this challenge by designing low-cost technology-led medical devices such as hand-held ECG monitors, one-touch blood pressure monitoring devices and more. Some startups are in the process of developing cutting edge devices that can detect and monitor several lifestyle ailments under one platform. With these products and services, these firms aim to solve some of the most pressing healthcare problems in the country at affordable prices.
What Lies Ahead?
As India is on track to becoming a $100-billion strong bio-economy by 2025, healthtech startups are working together to build a stable network across the country. Some of the key trends to look out for in the coming years include convergence of medical devices with channels such as telemedicine, digitization and electronic patient records maintenance.
Key players are looking to unite wearable technologies with cloud storage and AI to transform patient experience. Advances in medical devices is also beginning to impact clinical research in a big way. This segment will also influence the growth of the home-based care segment in India.
With more than $3 billion invested in the sector and the government favoring the medical device industry under the Make in India initiative, the time is right to boost research and development to create some next-generation technologies, including wearable devices indigenously. While many of these world-class devices still remain expensive for the rural masses, it is to be seen how Indian firms take technological innovation in healthcare to each and every part of the country next year.