The story so far: On April 26, the Union Cabinet approved the National Medical Devices Policy, 2023. The policy endeavours to facilitate an orderly growth of the sector and in turn, achieve the public health objectives of access, affordability, quality and innovation. It is expected to help the domestic medical devices sector market grow from $11 billion to $50 billion by 2030 alongside achieving a 10-12% global market share over the next 25 years. The aim is to provide the required support and direction, and help the sector become “competitive, self-reliant, resilient and innovative” to cater not only to domestic but global needs.
What does it do about regulatory streamlining?
The most significant of the introduced measures entail regulatory streamlining. The policy enhances the role of the Bureau of Indian Standards (BIS) along with designing a coherent pricing regulation.
Pricing regulation is particularly important for addressing a broader challenge in the domestic device manufacturing sector. Rajiv Nath, Forum Coordinator at the Association of Indian Medical Devices Manufacturers (AiMeD) told The Hindu that some private hospitals give higher priced products instead of available low-cost options.
“Because of this, the manufacturer or importer of India is tied up in a system of market operating with artificially inflated MRP labelled on the device,” said Mr. Nath, adding separately, “we have been seeking MRP of imports be monitored and compared with imports’ landed prices and steps taken to control when found irrationally excessive.”
He was optimistic that the policy would enable monitoring of prices and curbing of such practices.
Besides capping prices, the streamlining endeavour will also create a single window clearance system for licensing of medical devices, combining relevant departments like the Atomic Energy Regulatory Board (AERB), MeitY and the Department of Animal Husbandry and Dairying (DAHD).
What about human resource development and innovation?
To ensure a skilled workforce and create future ready MedTech human resources, comprising scientists, regulators, health experts, managers, and technicians, the policy would support dedicated multidisciplinary courses for medical devices, including futuristic medical technologies, high-end manufacturing and research.
This would complement the Department’s proposed National Policy on Research and Development alongside innovation in the pharma-MedTech sector in India. Further, centres of excellencein academic and research institutions, innovation hubs, and ‘plug and play’ infrastructure are also being planned, alongside support to start-ups.
The policy also seeks to establish and strengthen large medical device parks and clusters with quality infrastructure facilities close to economic zones with requisite logistics connectivity. This is expected to be a collaborative venture with the State governments and industry, resulting in better convergence and backward integration with the industry.
Ensuring an ecosystem to encourage private investments, series of funding from venture capitalists and potential public-private partnerships (PPP) is a key component of this endeavour. This will also be supplemented intervention programs such as Make in India, Ayushman Bharat, Heal-in-India and Start-up mission.
Need for human resources, innovation
Human resources, innovation and investment are particularly important for the medical devices sector because, despite relatively low entry barriers, it is highly capital-intensive and requires continuous skill development to be in consonance with newer technologies.
As per the Indian Brand Equity Foundation (IBEF), a huge gap still exists in the current demand and supply of medical devices from U.S., China and Germany; India has an overall 70-80% import dependency on medical devices. Many domestic and international manufacturers view this under-penetration as a potential growth opportunity.
Why are we discussing imports?
According to Mr Nath, notwithstanding that India is among the major global manufacturers of equipment such as syringes, needles, surgical blades, surgical gloves, condoms, PPE, masks, hydrocephalus shunts, orthopaedic implants and intra-ocular lenses, it is highly dependent on imports for basic consumables like examination gloves, hot water bottles and home care products like blood pressure instruments, diabetes sugar monitors, and thermometers. . China and U.S. combined make up 60% of our import basket.
“If the National Medical Devices Policy (2023) and the Parliament Healthcare Committee recommendations are implemented then the trade imbalance can be corrected to be at least 60-70% domestic market share and a more reasonable 30% imports,” Mr. Nath argues.
What is the Export Promotion Council?
The policy envisages the creation of a dedicated Export Promotion Council for the sector under the Department of Health. This would be a forum to deal with varied market access issues, while also combining and sharing stakeholders’ knowledge and expertise.
Mr. Nath argues it should be made functional “as soon as possible” and be used for promoting Brand India overseas.
Broadly, how does our domestic market look like?
The domestic industry comprises a combination of large multinationals, small and mid-sized companies. As per the IBEF, India is the fourth largest Asian medical market after Japan, China and South Korea and is among the top 20 globally. It is estimated to grow at a CAGR of 15% — two-and-half times the global growth rate. Between 2020-25, the diagnostic imaging (which includes radiographs and ultrasound) market is likely to expand at a CAGR of 13.5%.
Exports of medical devices stood at $2.90 billion in FY 2022; this is estimated to scale to $10 billion by FY 2025. Key export countries include U.S., France, Singapore, China, Turkey, Brazil, the Netherlands, Iran and Belgium.
India’s major medical clusters are Gujarat, Karnataka, Maharashtra, Haryana, Andhra Pradesh and Tamil Nadu. Their manufacturing expertise varies from pharmaceuticals, medical electronics, stents and implants to low-end medical consumables.
“We are more than hopeful that the policy will help boost manufacturing, help traders and importers to start investing in factories and end the import dependency forced upon India and the ever-rising import bill which shot up by 41% to over Rs 63,000 crore alongside making quality healthcare accessible and affordable worldwide,” says Mr. Nath.
However, a pending demand within the industry is a separate law for medical device manufacturers. “AiMeD recommends that the law that treats manufacturers as criminals should not be applicable, instead, there should be a separate law like those in Europe, Canada, Japan, Brazil etc,” Mr. Nath says, adding, “This will give developers and manufacturers the freedom to make innovative products.”
