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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.




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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