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Medical Devices in India: Overcoming the Challenges and Capitalizing on Opportunities

 

Mr. Chandrasekhar Padamkumar President, Kerala Medical Technology Consultant, Director, Kerala Life Science Park and Former Managing Director, Penpol Pvt. Ltd., Trivandrum

I am going to speak about the topic from the perspective of someone who helped build up a medical device company from scratch in the nineteen eighties: a time before economic liberalization, when the business climate in India was very different and hardly conducive to doing business. We started a medical device manufacturing company called Peninsula Polymers Limited (Penpol) in Trivandrum, Kerala, in 1985, based on technology developed by the Sree Chitra Tirunal Institute for Medical Sciences and Technology (SCTIMST).

Some unique challenges that we faced in the early days were the following: first generation entrepreneurs, lack of capital, no background in business and technology, untried technology developed by a new Institute which had no experience of technology development and technology transfer. These added to the normal challenges that any startup would have faced. Suffice it to say, that the company had a huge struggle in the early days to absorb the technology and establish the manufacturing process. If not for the strong and steady support of government institutions including the Kerala State Industrial Development Corporation (KSIDC), the National Research Development Corporation (NRDC), the Bank and SCTIMST during the early years of the company, I am sure the company would not have survived for long. The lesson here is the need for patient capital for the medical device industry; it is not an industry for the weak of heart, or impatient investors.

The company grew from modest beginnings to become one of the largest Blood bag manufacturers in the world after it was acquired by the Japanese multinational, Terumo Corporation. It now occupies pride of place in the Terumo group as the flagship Blood Bag factory.

It is necessary for us to consider the background of the medical device industry in India before we discuss the challenges and opportunities. The Indian medical device industry can be said to have formally taken shape in the nineteen eighties after the Government of Kerala set up SCTIMST in 1976 and the Institute developed first the Blood Bag and a host of medical devices soon after, including the blood oxygenator, cardiotomy reservoir, tubing for the extracorporeal circuit in heart-lung machines and the artificial heart valve. This period saw the advent of organized businesses into an industry which had until then been a cottage industry. A few companies were set up during this period like TTK Biomed Ltd., SPIC Pharma, Trivitron Diagnostics, Core Healthcare Limited, HLL Lifecare Limited, Peninsula Polymers Limited, Transasia Instruments Ltd and Hindustan Syringes Ltd. However, the industry did not really take off thanks to a combination of factors that we will examine in the following paragraph.

The main challenges that the industry faced in the early years can be summarised as follows:

• Lack of regulations
• Legacy of poor quality due to poor infrastructure, talent and organisation
• Capital intensive nature of the industry
• Flawed public procurement system with weak technical and quality evaluation
• Poor supply chain
• Poor service and maintenance

The Government has taken a major step forward by finally bringing medical devices under the ambit of the law. While it will take some more time to reach international standards of regulation and quality, the die is cast and industry will have to shape up sooner or later.

Industry needs to step us and invest the needed amounts to make quality products. The investment is needed in cGMP facilities, R&D, qualified and trained people and biocompatible materials which meet international standards. Industry also needs to reach out to research institutions and universities and tap the enormous, untapped resources lying hidden there.

The Government needs to overhaul the public procurement system and bring it in line with well proven global models like Australia, Japan, UK, Brazil and Thailand.

As industry and the economy have grown over the past 50 years, there is a sea change in the infrastructure and general business environment which is much more favourable today. Some opportunities that are waiting to be seized by those who are willing to go the extra mile are detailed below:

• Fill the demand for high performance biocompatible materials in collaboration with institutions like SCTIMST, IISc, IIT Madras, IIT Kanpur, IIT Delhi, IIT Bombay, CIPET and a host of others across India

• A big opportunity awaits entrepreneurs who can be ancillaries to medical device companies by supplying subassemblies, cabinets, components, sheet, tubing, bags and other intermediates

• A very big opportunity exists in the export market for high quality, competitively priced medical devices, especially in Europe, Asia and Latin America

• The domestic market will gradually become more in tune with global standards, and I expect that there will be a surge in demand for international standard products in the next 5-10 years as regulations are enforced. Import substitution will be a major driver for the Indian medical device industry

• Services like testing, calibration, contract manufacturing, labelling, packaging and assembly, and maintenance are other large opportunities waiting to be tapped

India has demonstrated its ability to be a global player with successes in agriculture, biotechnology, space, atomic energy and pharmaceuticals. We started well in the nineteen seventies but missed that particular medical device bus. The time is right for India to get on board. Let’s make sure we get on the bus this time. In conclusion, I would like to narrate a few highlights of the Kerala medical device ecosystem which is reasonably well developed and affords a good foundation for the growth of the industry. Here are some salient points about Kerala:

• A number of top class research institutions including SCTIMST, the Rajiv Gandhi Center for Biotechnology (RGCB), the Indian Institute of Science Education and Research (IISER), the Digital University of Kerala which is the first digital university in the country, the Kerala Genomics Data Center (KGDC), C-DAC, ERTL, NIIST, Institute of Advanced Virology, Fluid Control Research Institute (FCRI), National Institute of Speech and Hearing (NISH), National Institute of Physical Medicine and Rehabilitation (NIPMR) and the Institute for Communicative and Cognitive Neuro Sciences (ICCONS)

• Universities such as Kerala university, MG University, Cochin University of Science and Technology (CUSAT), Kerala University of Health Sciences (KUHAS), Central University of Kerala (CUK), Kerala Veterinary and Animal Sciences University (KVASU) and University of Calicut

• Hospitals like SCTIMST, Medical Colleges, Aster Medcity, KIMS, Lakeshore, Rajagiri, Regional Cancer Centre, Malabar Cancer Center, MVR Cancer Center, MIMS and Dr. Moopen’s Medical College

• Medical device companies meeting international standards and doing global business for over 25 years including Dentcare, Agappe Diagnostics, Careon Healthcare, HLL Lifecare, Dynamic Technomedical, Terumo Penpol, TTK Healthcare, SFO Technologies, St. Marys Rubbers, Kanam Latex and BPL Medical Technologies

The Government of Kerala has identified the medical device industry as a sunrise, priority sector industry and set up the Kerala Medical Technology Consortium (KMTC) to catalyse the existing ecosystem and help make Kerala the medical device hub of India by 2032. We welcome you to be a partner in our journey to making the country a global player in medical devices.