Low cost medical devices Driver for rural healthcare

A recent study says medical devices market expected to grow to USD 8.6 bn by 2020 and if India can lower the cost of medical devices, it can be a game changer. This would tremendously help rural populace. BK Jha reports
Low cost medical devices Driver for rural healthcare

Healthcare in India is at cross-roads. Multiple aspects of the Indian healthcare system are in a state of flux -including role of the government, lack of adequate public spending and poor health infrastructure. Rural populace still cry for access to affordable and quality healthcare services.

Access to affordable and quality healthcare in India remains a major challenge. To meet this challenge, the need for innovation in healthcare is immense. There are several areas where innovators can come in to address access, cost and quality related need gaps. It is promising to note that the healthcare sector, including the government and private players, has geared up to meet the challenges. On the one hand, the government is focusing on conducive policy framework to push the healthcare sector through its much touted ‘ Make in India’ campaign and on other hand, the industry has shown its interest to collaborate with the government to actualise the benefit from the several policy reforms measures. In turn, this combined efforts of public- private entities on several fronts like domestic manufacturing, skilling manpower and creation of adequate health infrastructure would help in making rural healthcare services efficient and affordable.

According to a recent study, healthcare sector is expected to reach over USD 280 bn by 2025 and a very critical component of the sector- Medical devices market- is expected to grow to USD 8.6 bn by 2020. It is widely agreed that by lowering the cost of medical technologies, India can provide affordable healthcare facilities, not only at tertiary level but primary and secondary level as well. The study reveals that the reduction in cost can go upto 40 percent.

“The healthcare sector is expected to reach USD 145 bn by 2018 and over USD 280 bn by 2025. Though India’s healthcare sector has evolved significantly in the last decade, challenges exist in providing access to quality healthcare for very large number of rural population in the country,”says Anjan Bose, Secretary General, NATHEALTH.

NATHEALTH, Healthcare Federation of India, an apex body for the healthcare sector recently held its 3rd Annual Event – NATEv2016 in New Delhi. The industry experts, policy makers and other stakeholders deliberated on healthcare issues. On the occasion the Federation, partnered with Deloitte, released a Paper on ‘ Make in India.’ The Paper presents imperatives for actualizing ‘Make in India’ for the medical devices industry.

“Lower financing and expenditure on healthcare, inadequate healthcare infrastructure and dual diseases burden are key challenges faced by the sector. Medical technology cost in setting up a tertiary care hospital amounts to 30-40 percent. Cost of medical technology/equipment/devices is 20-25 percent of total healthcare cost for a patient. If the cost is reduced, one can imagine the benefits for a patient,” Bose adds.

The medical devices market is estimated to grow organically at 15 percent to USD 8.6 bn by 2020. Though the current domestic medical devices market represents only 1 percent of the global market, India is among top 20 in the world and among the top 4 in Asia (after China, Japan, South Korea).

“The medical devices market has grown at 10 percent in the past decade and is expected to have an organic growth of 15 percent in the medium-term against global industry growth of 4 – 5 percent,” says Sushobhan Dasgupta, MD, Johnson & Johnson Medical India & Past President, NATHEALTH.

Industry estimates that India’s medical devices market has the potential to become USD 50 bn industry by 2025 when the contribution of India to the incremental medical devices industry growth would become substantial at 31 percent.

“Given the increasing demand for healthcare and the critical role of Medical devices in providing affordable and accessible health, the time is right to align the eco system to view medical devices as a strategic driver. The “Make in India” initiative is the perfect opportunity to create a step change in Indian healthcare and especially in the medical devices industry,”says Charu Sehgal, Partner and Life Sciences & Healthcare Leader, Deloitte India.

Rahul Khosla, President Max Group and President, NATHEALTH says, “ We need qualified manpower to reap the real benefits of ‘ Make in India.’ The industry would collaborate with the government in each area including skilling to ensure that quality and affordable health services reaches last mile.”

As the demand for medical devices increases, India is expected to contribute significantly to the growth of global medical devices companies . MNCs like General Electric, Philips, Medtronic, Siemens etc. have been increasing their manufacturing footprint and research centers in India both for Indian market as well as for exports. Newer Markets are opening up due to India-based innovation. The USA, Africa, Middle East, China and South East Asia are a few key export destinations from India. India presents a good opportunity for companies to de-risk their business from dependency on one manufacturing location and tap potentially huge domestic market at the same time.

“Given the criticality of medical devices for growth of the healthcare sector and challenges faced in medical devices manufacturing, it is imperative for the stakeholders in the medical devices and the larger healthcare ecosystem to constructively engage with the Government to facilitate ‘Make in India’ for the medical devices industry," Bose emphasises.

The Government can shape the growth of indigenous manufacturing in its role as a policymaker, development agency and buyer of medical devices.The industry seeks support from the government. The Federation recommends separate regulations for medical devices and stresses on state specific incentivization for manufacturing.

No doubt, there is immense opportunities. “ Healthcare industry should be ready to grab the opportunities. The government can be a facilitator and is prepared to listen from all stakeholders to meet the challenges,” says Rajeev Aggarwal, Joint Secretary, Department of Industrial Policy and Promotion (DIPP).

“The government is working hard to make entire health care system well regulated. Several Acts including Cosmetic Act are being modified. The process of getting Patents Rights (IPRs) has been streamlined. The companies can get patents on time and can carry on innovations for better commercialisation,” he adds.

“For healthcare sector, from the government’s side, things are moving forward and fast,” emphasises Aggarwal.

“The private sector has worked with the government to bring in quality standards in the country and now the time is right to bring in a change in the way the private healthcare sector is being perceived,” says Preetha Reddy, Vice Chairperson, Apollo Hospitals.

“Over the last few decades, our country has witnessed a revolution in medicine, there is a much greater understanding of diagnosis and treatment of diseases, medical care has become lot more accessible and affordable,.” she adds.

Going forward, role of private sector would be critical as they are the main carrier of technology-driven services. In healthcare sector, technology can change the care paradigm. It is high time for both the government and private sector to join hands to leverage the potential that exists in medical technology area to boost the healthcare services at all-primary, secondary and tertiary- levels.

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