India's Medtech Industry Poised For Expansion

By Jof Enriquez,
Follow me on Twitter @jofenriq

India's medtech sector is set to grow in the coming years due to investments in hospital infrastructure, an expanding insurance market, rising demand for more healthcare services, and increasing government support.

"We believe that the Indian market place is going to grow in double digits, greater than 10 percent over the next five years," Vincent A. Forlenza, CEO of medical device maker Becton, Dickinson & Co., told Live Mint in a recent interview. Forlenza cites increasing private sector investments in hospital infrastructure and an expanding insurance market, fueled by a growing middle class, as major factors behind this expansion.

According to Amritt Inc., a California-based consulting firm that helps American companies to succeed in India, 80 percent of hospitals in India are private-owned and 20 percent are government-run. However, the hospital ecosystem is not a simple dichotomy, but rather a highly-segmented sector that presents many investment and sales opportunities for both established medical companies and new entrants, as healthcare expenditure is projected to rise at over 15 percent annually for at least the next five years.

"Putting all this together, India becomes an attractive market place for BD and for other multinational companies. India will be a bigger contributor to BD’s growth than it was in the past," said Forlenza. He adds that BD currently is making over a billion medical devices in India, and is expanding its plant in Bawal, Haryana, to add manufacturing and export capability to Europe, Middle East and Korea.

The Indian government wants to duplicate its success as a global exporter of pharmaceutical products, but the country has remained heavily dependent on imports for medical devices, some of which are allegedly overpriced beyond the reach of most Indian patients.

To address overpricing, The National Health Systems Resource Center (NHSRC) in August recommended capping prices of cardiovascular stents after reports surfaced that patients were being overcharged. Medical device price controls inched closer to fruition recently when the government's department of pharmaceuticals met with medical device manufacturers, health ministry officials, and other stakeholders to come up with a final model to regulate and cap prices on device products, according to ET Health World.

Another high-profile project is the creation of India's first medical device park in Gujarat, one of two planned industrial parks dedicated to medical device manufacturing. First announced in April, the parks are envisioned to boost the domestic production of local, high-end medical devices to counter the dominance of imports.

"We want to make India self-sufficient in the field of medical devices," says Union Government minister of chemical and fertilizers Ananth Kumar, who confirmed construction of the Gujarat facility in a report from The Economic Times. "The new institution will emerge as a vibrant research and development centre dedicated in the field of medical devices."

The Indian government also is looking to rationalize the country's regulatory environment by creating a new standalone regulatory agency called the National Medical Device Authority (NDMA), which will be tasked with promoting the local medtech sector, enforcing stricter safety and manufacturing standards, and installing price controls for medical devices, equipment, and supplies. In addition, The Central Drug Standard Control Organisation (CDSCO) – India's equivalent of the U.S. Food and Drug Administration (FDA) – will help local medtech companies raise their safety and quality practices to world-class standards, and implement a nationwide device safety monitoring program called the Materio-Vigilance Programme of India (MVPI).

According to the US-India Business Council, the Indian medical device industry could grow from its current value at $4.4 billion to $7 billion by 2016. The business advocacy organization of American and Indian companies has called for continued collaboration between government and industry to create a better ecosystem for medical device business and innovation.