Rising from USD 4-10 billion by 2020
The most cherished subject of discussion cutting across boardroom meetings, corporate strategy decisions, bureaucratic circles, in academics and almost all business events is ‘Make In India’. It sets an all-pervading national mandate for stakeholders to position India’s strengths and opportunities in the manufacturing sector on the global map.
Among several others, the medical device industry has been identified as a vital sector under the ‘Make in India’ mandate. It is a welcome sign that the current government has taken timely note of this sector, besides its potential to contribute to the Make in India campaign.
India’s med-tech sector, around USD 4 billion currently rests at around 1% scale with respect to rising global med-tech industry sales which is forecasted to reach USD 514 billion by 2020. A sustainable long-term strategy for industry fueled by correct policy initiatives by the government can catapult current growth rates of 16% further up. Herein begins a journey of making the right choices to achieve the desired objective for making med-tech sector robust. The desired outcomes, therefore, are crucial to be carefully framed and envisioned before we take formative steps towards achieving them.
If one were to take cues from global economies, there are several options that qualify as the desired objectives for Indian Med-Tech industry progression:
Leveraging the global opportunity and emerge as a manufacturing hub with long-term sustainability.
Emerge as an Intellectual base for med-tech innovations and R&D, becoming the IP-engine of the
Emerging as a bulk manufacturer and exporter of low-risk med-tech devices, which can be a low hanging fruit (but would compromise a much bigger reality).
Or, just aiming at import substitution in any which way possible!
Policy Framework for Med-Tech Devices Industry:
Keeping in mind the growth of the med-tech sector it is essential that an industry policy is made, creating enough pull for investors and at the same time incentivising MSMEs/Indigenous players. Divisive policy formulations can prove detrimental to both sides. An industry which makes in India and contributes to the country’s GDP, irrespective of its origin and size must be treated at par and incentivised for growth.
It’s worth appreciating the fact that India’s growth story in IT sector and automotive sector has leveraged both: the global supply chain dynamics and the benefits of knowledge sharing/ technology transfers across the globe. The world is opening up in this sector with tremendous potential and with the same rigour India must embrace this global opportunity to make a mark by amalgamating our country’s inherent strengths in it.
It is a misnomer that corporates have established their global R&D centres in India purely due to low-cost manpower. India’s engineering and innovation talent has lured global players much more than the mere cost effectiveness of the services rendered.
We also need to bridge the last mile of innovation by creating linkages to academia to foster innovation into commercialisation and spin-offs. A mechanism to facilitate product development from research publications is paramount for the growth of the sector.
A strong and scientific, regulatory framework can only ensure safe and efficient adoption of med-tech produce in India and also uphold the brand ‘Made in India’ overseas. Policy directives are long awaited since a well-defined regulatory system can be the best yardstick for product-quality compliance.
Product adoption and market penetration should be promoted on the basis of quality compliance, instead of ethnicity or origin of the produce.
Demand Generation through Capacity Building and Training:
Medical technology thrives on innovation that cannot be done in academic silos; it has to be well integrated with a user’s (doctor’s) perspective and equal participation in the innovation for successful adoption. Also, the validation/ evaluation of a product need broad-based rules to ensure patient safety and also not to curb innovation.
At the policy front, a mature approach is desired to increase access and create demand, thus increasing the market size. Training of doctors in medical devices is more of the industry’s responsibility than a mere marketing strategy.
With a history of being a receiver of technology, we now know that a mere business-driven technology transfer may not always suffice for key requirements. It may not always suffice because of a misfit w.r.t cost, capability, usage, etc. and it might lead to poor absorption. This points us to a direction for motivating ourselves and synergising towards innovation in India, which can be readily absorbed.
These specific points must be supplemented with broader industry-wide policy initiatives on fiscal benefits, creating clusters for innovation and manufacturing, facilitating ease of doing business to promote Investments in India, etc. Let’s pledge to embark and sensitise stakeholders about a wider canvas and the right choices, instead of being pulled down in its formative years of growth by buckling, knee-jerk policy measures. The author invites dialogue and views on this subject of immediate importance for this sunshine sector. As Leo Burnett said so lucidly –”When you reach for the stars you may not quite get one, but you won’t come up with a handful of mud either”.
It is our hope to see India as a global leader in the med-tech sector where it can live the ‘opportunity’ to meet the rising healthcare demands of not just 80% of world population in non-affluent countries, but also the remaining 20%, who are now seeking cost efficient solutions.
(Ajay Pitre is Co-Chair of FICCI Medical Devices Forum & MD, Pitre Business Ventures Pvt. Ltd. The views expressed are personal)