Indian medical device industry is fragmented, price-sensitive and bogged down by infrastructure constraints like erratic power supply, low doctor-patient ratio and shortage of trained personnel to handle complex processes. These are pain points that Indian start-ups are trying to tide over to achieve market acceptance, stated Vishnu Bhat, managing director, BlueNeem Medical Devices.
Nevertheless, Indian companies are developing products for the domestic markets. When combined with enhanced service quality and after-sales support, it is seen to go a long way in positioning Indian start-ups against competition from multinational companies, he added.
The government has created a favourable eco-system through the ‘Make in India’ and the Medical Devices Rules 2017, which came into effect from January 1, 2018. While the former gives an impetus to produce quality products cost effectively, the latter prevents import dependence, Bhat told Pharmabiz in an email.
As Indian companies are predominantly in the services sector, accessing niche product development talent for specialized medical devices manufacturing has been a challenge. A lot of product development skills and hardware talent moved to services sector for better remuneration. Apart from a shortage of product designers, India poses several challenges for med-tech design and manufacturing, he noted.
Currently, though the Indian medical devices industry is on a growth trajectory and is viewed as a sunrise sector, venture capitalists and private equity firms do not see much of business potential in these companies. The sector is largely ignored, with shorter investment cycles for PE or VC firms who look to exit quickly for quick ROI (return on investment) and for the fact that Indian companies do not offer a varied product portfolio to scale-up and the segment being highly capital intensive with long gestation periods. The large R& D budgets of international companies are major deterrent for small domestic players to succeed. Moreover, VCs and PEs traditionally invest in mid-sized companies on the growth trajectory and have been reluctant to in investing in early stage medical device companies. However the outlook is quite positive, because Indian companies are aggressively pursuing innovation and we expect significant investments in the future, said Bhat.
Import dependent medical devices sector is expected to spur manufacturing through the 3 medical devices parks at Andhra Pradesh, Maharashtra and Gujarat. Additionally, local consumption coupled with strong exports demand will drive domestic demand.
Going by the import dependency and existing manufacturing capabilities, it is the diagnostic imaging in-vitro diagnostics, orthopedic prosthetics and consumables that indicate promising growth prospects. Quoting a recent report, he said India’s medical-device industry is growing at 15%, which is more than double of the global growth rate of 4-6%, and is expected to become a $25-30 billion industry in India by 2025. Currently, the imports account for over 75% of the estimated US$ 5.2 billion med-tech sector.
The new medical device rules raises the credibility of Indian companies on a global platform. The industry will take centre stage, as start-ups and small medium enterprises market specialty surgical devices like stents, catheters and high-end devices used in interventional radiology, said Bhat who added that even Blue Neem is moving towards disruptive innovation from incremental innovation