Trends
In Medical Device Distribution In India
Mr. Sanjay Jha
Director, ColMed |
India is currently the 4th largest
medical devices market in Asia after Japan, China and
South Korea and the medical devices market in the
country is expected to grow to USD 50 billion by 2025.
With a rapidly expanding healthcare
sector, India is today a lucrative market for all
global companies manufacturing and selling medical
devices and equipment. Most global companies are
already selling products in India or are planning to
enter the market. Even as the diversity and complexity
of the Indian market remains a challenge for
distributors, a series of new developments and trends
are laying ground for improved regulatory standards,
cost effective interventions as well as
improved supply chain management.
Prominent new trends that are
expected to impact the medical devices distribution in
recent years are : |
1. Distribution
Rationalization:
For OEMs, managing
distribution networks and sales channels effectively has
always been a significant area of concern. Today, many
OEM's have devised a strategy in which they focus on their
core job of developing products, leaving the distribution
conundrum to specialist group purchasing organizations. As
seen in the USA, the complete Distribution model is
outsourced to a few National Distributors, commonly
referred to as Group Purchasing Organizations (GPO), who
through their expertise and established tiers of
distribution, make available the medical products to
Healthcare Professionals. ColMed is one such Indian
company, which has been at the forefront of this
revolution in India. The GPO's big-dollar investment in
quality manpower and sophisticated inventory control
systems, help local distributors in Tier 2 & Tier 3 cities
in catering to health centers, by enabling them to procure
quality products at affordable price.
It is a win-win model
for all, since OEM's can focus on enhancing Product
Aware-ness, GPOs can use their expertise of distribution,
Tier 2 & Tier 3 distributors can purchase products at low
price in spite of limited buying volumes, and customers
get access to a wide array of products at reason able
price.
2. Pricing
Regulations by Government and its implication on
Distribution
Recognizing the need to
improve regulatory standards for medical devices, the
government has initiated measures to set up a separate
regulatory authority for this sector that hitherto came
under the domain of drug regulator Central Drugs Control
Standard Organization. The government is planning to set
up a Medical Devices Authority (MDA) that will devise
Indian regulatory norms for the entire spectrum in the
medical devices sector that till now adheres to FDA
regulations. The government is also working on rules for
rationalizing the trade margins for medical devices that
have been categorized as drugs. In fact, price caps have
already been introduced on devices such as stents,
reducing the profit margins of hospitals as well as
distributors.
All these measures are set to make
regulations more stringent for devices, even as price
regulations will have an impact on trade margins.
Distributors are now trying to work on finding innovative
distribution strategies that are more cost effective.
3. Reducing Quality Differentiation:
A number of factors have helped bridge
the brand differentiation between the products of MNCs and
local manufacturers. These factors include improvement in
quality of Indian manufacturing and wide scale
acceptability of Indian manufacturer products which offer
good results at lower costs. The wide brand choices have
reduced brand differentiation, which has helped local OEMs
to compete with International MNCs. Though manufacturing
remains limited to producing low technology products, a
few domestic companies and MNCs with manufacturing
facilities in India have successfully developed low cost
products that are on par in terms of quality with existing
products that require complex technical know-how to
manufacture. These products have succeeded in developing a
niche market in many regions globally. For example, Indian
manufactured heart valves have found new export markets in
Myanmar, Kenya and Thailand. This has helped the medical
devices exports register strong growth.
4. Improved supply chain management
using Artificial Intelligence & Machine learning
Supply chain management is often highly
under-rated part of an efficient distribution network. A
report by an American healthcare supply chain management
company concluded that improving supply chain management
can enable health systems to reduce their supply expenses
by an average of 17.7%, equivalent to USD 11 million
annually per hospital.
Growing realization about the need to
institute efficacious supply chain management practices
have led distributors to turn to sophisticated
technologies like artificial intelligence (AI) and machine
learning that can leverage big data and help standardize
processes. This in turn results in better predictability,
optimization of supplies and reduction of wastage and
expenses. AI based algorithms that use vast data for
predictive analysis proves to be particularly useful in
supply chain applications. Similarly, a McKinsey
study found that using AI to enhance supply chain
management could cut forecasting errors by 20% to 50%.
As Medical Device & Consumable
distribution moves towards optimization of resources, AI
based applications are set to become a norm in supply
chain management practices.
5. Greater consolidation of
businesses and growing role of private
equity players
A rapidly growing healthcare
distribution business is fast catching the attention of
private equity players who have turned towards investing
in medical distribution
businesses. This will result in greater standardization of
practices and inflow of more expertise in the sector.
Apart from entrance of more private equity players, a
greater consolidation of businesses also seems to be on
the cards. Globally, pharmaceutical and devices
distribution have consolidated to a large extent. However,
in India it is still largely fragmented. A series of
acquisitions and mergers are already underway in the
sector and the trend is likely to continue. As we move
towards greater consolidation, this will also result in
better supply chain management practices and improved
technological prowess.
Collateral Medical (Colmed is the
abbreviation) is India's leading medical device,
instruments, consumables & disposables marketing and
distribution company in India. Our customers include
medical professionals, purchase managers; and endusers
such as patients, expecting mothers, etc. We serve our
customers through direct mail. We have 100+ industry-specialised
support staff, field sales representatives, backed
with sophisticated organized order processing
enterprise resource planning software to streamline
procurement, ordering, invoicing, dispatch &
accounting.
We support medical professionals by
providing products and services in an efficient and
transparent way. Our customers are connected, informed
and are known to adapt to using technology to their
advantage.
We are committed to providing the
industry with high-quality medical devices at the
lowest possible prices. We believe that this will not
only improve the quality of healthcare access, but
will also increase healthcare access.
Our industry-specialised, highly
trained support staff and field sales representatives
are proof of our customer-centric philosophy. We keep
abreast of industry competition and trends within our
core markets, and our customers have come to rely on
our ability to adapt to changing markets and the
industry's evolving needs.
We work as a team, sharing ideas
and conventions, to deliver the best possible outcomes
to our customers. We ensure integrity by delivering on
our promises and making things happen.
Our team’s desire is to make
significant contributions to the communities in which
we work. We have a restless desire to take things to
the next level, to stretch our abilities and become
the number one full-service provider to independent
hospitals and doctors who operate under controlled
budgets.
Our robust partnerships with
various national & international OEMs like 3M, J&J,
Roche, BPL, Cochlear give us an edge over our
competition. We always strive for symbiotic
association with various Brands. There are many
success stories of exclusive OEM tie ups which has led
to various Medical Devices & Consumable companies in
reaching length and breadth of India, using our
professional service & robust distribution partners
pan India.
(Based on views shared by Mr Sanjay Jha, Director ,
ColMed as pushed on the following web link :
https://www.biospectrumindia.com/views/70/15585/trends-inmedical-devices-distribution-2019-and-beyond-.html) |
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