A TECHNO-ECONOMIC NEWS MAGAZINE FOR MEDICAL PLASTICS AND PHARMACEUTICAL INDUSTRY
Our 19th Year of Publication
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Cover Story

Medical Device Development

As per the recent “India Medical Technology Report – 2012 by PwC," Medical technology (Medtech) companies are accelerating their investments in emerging markets, and India is a prime target because of its large population, growing middle class, and improving healthcare infrastructure.

Annual growth exceeding 15% and estimated Medtech industry revenue of about $3 billion in 2011, India ranks in the top three emerging nations for direct investment by large, multinational Medtech companies.

Key trends driving Indian Medtech growth are :

• Rapidly growing middle class
• More people getting insurance coverage
• Improvement in healthcare infrastructure
• Stable regulatory environments
• Increased government healthcare spending
• Penetration into rural markets
• Increased awareness about products
• Introduction of new low-cost products
• Better IP protection

Medical Device Development : Global Scenario

Although large medical device companies typically develop successive iterations of existing devices, most new device categories are typically developed by venture-backed start-up companies. Typically, a physician and/or engineer inventor conceives of a device solution to an unmet clinical challenge, initiates the patent process, and builds preliminary device prototypes. Preliminary bench and animal testing may be performed using the inventor’s or an acquaintance’s personal funding (angel investors). Further development typically requires engaging a team of engineers who work closely with physician advisors to bring the concept through the “design-build-test-redesign” cycle of bench and animal testing. This preclinical stage typically takes 2 to 3 years and depending on the nature of the device may consume US$10 to $20 million before the device is ready for clinical testing. These capital requirements exceed the means of most angel syndicates and are typically obtained from venture capital firms in the form of equity financing.

A small percentage of device ideas are conceived in academic medical centers using federal or other grant funding. Few academic centers have the intrinsic capabilities to develop the device beyond the early prototype stage.

The medical technology industry in India also needs to innovate in order to address the challenge of low penetration and meet the healthcare needs of all income segments. As analyzed in a recent report by “Deolitte” and CII, In a country like India, where resources are scarce but needs are great, solutions have to be affordable, reliable, resilient, easy to distribute, and easy to use. Consequently, frugal innovation is the way to go. Companies need to squeeze costs so they can reach more customers, and consequently exploit economies of scale. Frugal approaches to innovation are particularly critical in the Indian medical technology industry to make modern care accessible, available and affordable to all. Existing demand for medical technology in India is concentrated in big cities. Innovation will help medical technology players create a new market in the lower income segments, primarily, smaller towns and rural areas, and leapfrog to the next level of growth.

In an emerging economy like India, disruptive and incremental innovations that are capable of lowering the cost of product/ delivery are more suited in the short-run, than radical innovations which introduce advanced technologies that may be sometimes more than what the consumers need or demand. Indian medical technology industry needs “low-end disruptions” which target customers who do not need the full performance valued by customers at the high end of the market, as well as incremental innovations that make changes to existing products to launch no-frills or lower end versions. These innovations have the capability to impact a larger segment of the population which is price conscious and driven by affordability.

Lack of research and development (R&D) facilities specifically dedicated for medical device sector is posing as a major impediment for development of this sector. At present, the Sree Chitra Tirunal Institute for Medical Sciences & Technology (SCTIMST) at Thiruvananthapuram is the only big R&D facility in the country that has some dedicated programme for medical device industry with a distinction of national importance. For the development of this sector we need to have more R&D institutes that will help in providing and supporting testing and research of newer and better techniques. Investment in R&D must

In an emerging economy like India, disruptive and incremental innovations that are capable of lowering the cost of product / delivery are more suited in the short-run, than radical innovations. which introduce advanced technologies. Indian medical technology industry needs “low-end disruptions” which target customers who do not need the full performance valued by customers at the high end of the market, as well as incremental innovations that make changes to existing products to launch no-frills or lower end versions.

increase from current level so that companies can develop value-added products through innovation. We need faster momentum to keep up with the speed at which the global market is moving on and to attain this, it is required to have conducive environment focusing on developing proper infrastructure which will complement these growth prospects.

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