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Growth
Dynamics For Indian Medical Device Industry
The Medical Device Industry
Medical Devices are an extremely diverse group of
products. This covers very simple applications such
as first-aid bandages, tongue depressors, walking
frames and plastic tubing, to more complex devices
such as implanted cardiac and neurological devices,
robotic surgical systems, and magnetic resonance
imaging devices.
The industry is characterised by high interdisciplinary
with extremely high innovation dynamics. Medical
Devices firms rely strongly on research, technology
and engineering and thus require a wide-range
of skill sets such as medical and technical skills.
Both high-technology solutions and basic or frugal
supplies characterise the industry.
The Medical Devices industry is globalised and specific
parts of the final product are delivered in different
places of the world. The industry is specifically
sensitive to copycats and firms are careful in not
being copied by others or overseas. This is why the
different industry segments in the value chain
often do not trust each other, which is a barrier
to information sharing and collaboration.
Challenges
The key challenges of the industry include the move to
value-based health care, where the emphasis
is on solutions, security and affordable costs;
increasing global pressure on healthcare costs, growing
regulatory reforms and scrutiny to numerous issues,
including the process by which
products gain marketing approval; and resource
constraints.
Medical Device Industry Value Chain
The medical devices value chain ranges from research,
technology and development, raw materials /component /
sub-assembly manufacturing,
assembly, distribution, to marketing, sales and post sales
services. Diverse interactions characterise the
industry depending on the type of product.
Central actors are medical technology companies and
manufacturers (eg. responsible for machining, packaging or
sterilising the product). Manufacturers are suppliers of
specific parts (eg. original equipment
manufacturers), engineering firms, software
companies, clinical trial organisations, and certifying
bodies.
Upstream actors include research institutions, private
research laboratories involved in testing, The
dominant disciplines of this industry are
biomedical, automation, process design, product design,
quality engineering but often they
are also related to the pharmaceutical or chemical
industries.
Regulations influence businesses to a large extent, which
have to comply with complex regulatory,
customs, health safety and security regulations and
are responsible for meeting requirements such as
labeling, packaging or post-sales monitoring.
Regulation is an important driver behind innovations and
cross-industry trends.
On the downstream we find the customers such as hospitals,
laboratories, doctors’ consultancies and the
patients themselves, and other actors such as
logistical companies, medical equipment stores,
pharmacies, other retailers
and insurance companies.
A Make in India for Medical Device Industry
If Indian Medical System needs to get some sort of
independence, Make in India approach needs to become deep
rooted in the Indian Medical Devices Industry.
Interestingly the range is also huge, as compared to
medicinal products. However, medical devices industry of
India is miniscule in comparison with global production,
with disproportionate reliance on imports and indigenous
manufacturing being mostly restricted to products in the
lower end of the technology value chain. With such high
dependence of imports, not surprisingly, they contribute
nearly 25 per cent of an average treatment cost. While the
per capita spending on Medical Devices in India is the
lowest among BRIC countries, it represents a sizeable
growth opportunity.
Thus, a Make in India initiative assumes paramount
importance, not only to reduce technology gap but also to
reduce the cost of treating illness. But there are
challenges. Three issues are of critical importance -
unavailability of right quality raw materials &
components, lack of skilled workers and capacity to
implement quality needs.
Despite sufficient human capital in the country, the
industry faces the problem of inadequacy of the available
skilled and trained manpower in both quantitative and
qualitative terms. However, we would like to highlight
only one important bottle neck here.
Access to critical raw materials: Quality of critical raw
materials / components is not up to the mark in India.
Hence a number of critical raw materials are required to
be imported in order to meet international product quality
requirements. However the high import duty on these raw
materials / components as well as high costs of low volume
imports results in high cost of assembling in India which
in turn turns out as a non-viable exercise.
Substituting imported parts / components with that could
be manufactured by Indian Companies (as done by “Medical
Device Industry Clusters” in other developing countries)
would promote growth of the sector along with a greater
transfer of technology in design , development and
advanced manufacturing processes in the country . Products
/ components quality standardizations and also the
standardization in the components manufacturing processes
and facilities including appropriate regulatory norms (not
the same as finished products but appropriate for raw
materials/components manufacturing) will contribute
significantly towards the growth of Medical Device Industry
in India.
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