In Vitro Diagnostics, A Key Contributor to Medical Devices Sector

The world’s eyes are on India and the Government of India has woken up to the huge potential of growth offered by the medical equipment and the medical electronic sector. Ministry of Electronics- Meity is now treating this as a focus sunrise sector and has been in consultation with AiMeD and other stakeholders to replicate the success of the Cellular Phone industry.

Noteworthy initiatives in this direction include the establishment of six medical devices manufacturing “clusters” in the country, including Andhra Pradesh, Telangana, Tamil Nadu, and Kerala which are either fully operational or have got in principle approval.

The new scheme for medical devices and creation of medical device parks would certainly empower the creation of a comprehensive healthcare network that can provide capital intensive facilities required by devices manufacturers along with contemporary manufacturing units capable of playing a critical role in meeting the country’s demand.

Current COVID-19 pandemic has shown that diagnostics is an essential part of preventive healthcare in every country. The domestic diagnostic industry is still at a nascent stage, estimated at $9 billion (around Rs 675 billion) and is expected to grow at a CAGR of approximately 15% over the next five years. “Make in India and the goal for an Aatma Nirbhar Bharat can provide the required fillip to achieve this growth. To add to that, the pandemic has further provided the necessary impetus to scale-up domestic production.

In Vitro Diagnostics (IVD) Sector constitute a significant part of the healthcare component and this sector has in recent times witnessed immense progress largely due to technological advancements. Cutting-edge technologies have paved the way for the diagnostic sector to become a rapidly growing industry in the Indian medical devices market which can be broadly classified into equipment, reagents, and services.

Global IVD market is estimated at USD 85 Billion and India accounts for approximately USD 1.5 Billion (1.8% of global revenues). There has been a steady increase in the percent contribution of India to the overall global market over years and the key drivers include “Health Awareness”, “Demand for Quality Healthcare”, “Rise in Disease Prevalence”, “Advances in Clinical Research” and “Evolution of Newer Technologies”, amongst others.

Government of India is beginning to recognise the importance of diagnostics in preventing and treatment of diseases, pointing to the allocation of Rs 64,000 crores in the budget for FY 2021 22, with a focus on preventive healthcare and this should aid in boosting local manufacturing of diagnostic equipment and test kits in India.

IVD Market in India is hugely dependent on imports (approximately 75-80% of instruments and reagents are imported). There has been enormous focus on reducing the dependence on imports to make India self-sufficient and can meet the needs of the market where the imported products and solutions are not affordable. “Make in India” and “Atmanirbhar Bharat” are the key drivers in this direction. It is estimated that India has approximately 100,000 laboratories (70% IVD and 30% Radiology) and is anticipated to grow at 15-18% per annum. It is essential to consider two key aspects when we discuss the development of clinical diagnostic segment. This includes the consideration of “Evolution of IVD Market” and the second being “Evolution of IVD Technologies”.

Medical device companies are transforming themselves from devices / consumables providers to disease / care management organizations to address the challenges of accessibility and affordability (more specifically the rural markets). Connected devices utilizing digital platforms are making strong in-roads in this direction.