Medical devices and diagnostics (MDD) encompass a wide range of products used in the screening, diagnosis, monitoring and treatment of medical conditions. These devices and diagnostics play an important role in healthcare delivery, given the increasing use of evidence-based medicine.
The Indian medical devices industry is around $5 billion and constitutes around 5 per cent of the overall healthcare market in India. Let us look at various aspects of this industry in detail.
Product segments
Medical devices comprise three major product segments:
~ Electro-medical equipment : This comprises, among others, MRI, CT, PET machines, surgical robots, image-guided radiotherapy, cath labs, electro-physiology, linear accelerator, ultrasound, x-ray machines, patient monitoring and in-vitro diagnostics. It makes up about 55 per cent of the overall market.
~ Medical implants : Devices such as medical stents, orthopedic implants, intraocular lenses, cochlear implants and dental implants make up around 25 per cent of the overall market.
~ Medical disposables and furniture : This segment includes such items as syringes, IV sets, catheters, sutures, medical linen, patient beds, operating theatre tables and patient trolleys, and forms around 20 per cent of the medical devices and instruments market.
Steady growth
The industry in India has been growing at a steady compound annual growth rate of 15 per cent over the past five years, mainly for reasons such as growth in healthcare infrastructure, driven by investments in public health facilities, and the growth of private hospitals.
There has been growth in health insurance, aided by initiatives from the Centre and several State governments. Growth of private health insurance too has been responsible for expansion of the medical devices industry. Higher disposable incomes fuelled by economic growth have led to people seeking improved healthcare services.
New initiatives
India is heavily dependent on imports for medical devices, with nearly 70 per cent of our needs being met through this route. A slew of factors has constrained the growth of the industry so far. But this is set to change, with a number of initiatives announced in the last couple of years.
For one, 100 per cent foreign direct investment is allowed under the automatic route for MDDs. Apart from this, a new draft National Medical Devices Policy has been published to guide the growth of the sector. Medical devices are now being treated as a separate category, distinct from drugs, for the purposes of regulation.
Medical devices have been included as a priority sector under the Government’s Make in India initiative. Customs duty structures too have been amended to reduce import duty on raw materials and inputs used in their manufacture. There is also a proposal to set up special manufacturing parks in three States. Funding is also planned for medical device start-ups through government grants and loans.
Complementary players
While these initiatives from the Government are expected to give a big push to the industry, it is also complemented by the private sector.
Large global medical device companies have set up research and development facilities in India to design market-appropriate products. There is also increasing collaboration between the medical device industry and academic institutions to incubate ideas from young entrepreneurs and take them towards commercialisation.
Similarly, MDD companies also collaborate with hospitals to design and develop innovative products for the Indian market. Venture capital and private equity firms have made investments in the medical devices sector, while companies are tweaking their business model innovation through public private partnerships. A vibrant start-up ecosystem is developing, aided by the emergence of accelerators and incubators.