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Manufacturing Medical Devices In India

Many Opportunities

Himanshu Baid - Managing Director Poly Medicure Ltd., Co- Chairman of CII Medical Technology Group and Co – Chairman of PHD Chamber, Health Committee Abstract of Presentation made by Mr. Himanshu Baid during the 12th National Conference and Technology Exhibition on Indian Medical Devices & Plastic Disposables/Implants Industry 2015, Ahmedabad.

Mr. Himanshu Baid started his presentation giving an overview on the Indian Medical Device Industry.

He mentioned that, as per, “BCG Report”, the medical device sector in India is currently valued around 6.3 Billion Dollars against the global market of 280 billion dollars - just 2 to 2.5 percent market of the Global Medical Device Market, signifying a lot of opportunity today in India. Growing around 10-12% annually and by looking at the current growth rate, this sector is likely to reach around 20 Billion Dollars by 2025.

He however, mentioned about the challenges faced by the Industry including a lack of clarity in Regulations, access to market, the issue of price control as well as very low investment in the sector.

He mentioned that with less than 1% of GDP, the Government doesn’t spend enough on healthcare sector today as compared to neighbouring countries, like Bangladesh, Sri Lanka and Nepal. They have better GDP spent on healthcare compared to India. From the current budget allocation, it appears that healthcare is still not a priority. Mr. Baid mentioned that there is lack of innovation in the country. Still 80% of the population is not covered under any healthcare program.

However, he also mentioned that there are lot of changes that are happening. First of all, the Government of India has recognized Medical Device Sector as a Sunrise Sector as part of the “Make In India” Program launched by Hon. Prime Minister Mr. Narendra Modi.

Government saw the need of propelling the sector because 70- 80% of the devices are still imported to the country.

The Government wants more investment to come into the sector and hence, recently, Government of India has notified 100% FDI in Medical Devices Sector. This is a very important step according to Mr. Himanshu Baid. This policy will bring new opportunities for the medical device sector. There will be more investment from private equity investors and the strategic investors from abroad. It will encourage more collaborations, acquisitions and joint ventures and develop new technologies. It will make industry attractive through innovations. Capital will flow seamlessly into the country now. Maximum benefit will go to small start up company, SME and MSME sectors. FDI will bring more specific innovations to products for domestic demands as needed for Indian patients. Also, the Non Compete Clause has been done away with.

Another important change which has come is draft National Health Policy’2015. Our last Health Policy was made in 2002 and after 13 years the new Health Policy has come, as put on the website of Ministry of Health and Family Welfare. The most significant is that Government is now recognizing the need of investing more money on Healthcare. Like in education, government might bring a Healthcare Share to promote healthcare. The industry might see a fourfold growth in next five years.

Focusing on inverted duty structure and manufacturing, Mr. Baid mentioned, today most of the raw materials are expensive than importing finished products into the country. Under the “Make In India” national agenda, government is already looking at this anomaly of inverted duty structure through this national health policy. Of course, the key objective is to bring in at affordable prices for life saving technologies. The most important fundamental question here under the policy is to pass a Health Right Bill making health a fundamental right, in the way it was done for education. Today as like education has become a fundamental right, so, can Government take an initiative and make health a fundamental right for everyone. Countries like Brazil, Thailand and even China is moving in that direction where there is a major law, and this is the big contributing growth to healthcare industry as such. Also, in turn it propels growth in medical technology industry. China spends more than 40 Billion dollars on Healthcare annually on public health, so with the same population in India, similar population level, if we look at that kind of number which is there, and to cover and balance 80% of the population which has not covered under any healthcare program, this is the kind of investment which is needed today in the healthcare industry. And also, definitely this will be a huge trigger in the growth of medical device industry also.

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