|What are Sunshine Industries? |
Sunrise industry is a colloquial term for a burgeoning sector or business in its infancy stage showing promise of a rapid boom. They are typically characterized by high growth rates, numerous start-ups, and an abundance of venture capital funding.
Medical Device Industry in India
- This has been recognized as a key industry under the Make in India initiative and accorded the status of ―Sunshine Sector.
- Vaccines, drugs and medical devices are the three vital pillars of the modern healthcare industry.
- The current market size of the medical devices sector in India is estimated to be USD 11 billion and its share in the global medical device market is estimated to be 1.5%.
- India is the 4th largest market for medical devices in Asia after Japan, China and South Korea and is amongst the top 20 markets in the world.
- Indian medical devices industry has potential to reach 50 billion dollars by 2030.
Segments of medical devices
There are different segments into which the medical device industry is classified based on the type of products produced.
- Equipment and instruments: They contribute largely to the total market share and include devices like ophthalmic instruments, dental products, medical and surgical sterilizers, and therapeutic respiration apparatus.
- Diagnostic imaging: The total market share of this segment is the second and categorizes devices like electro-diagnostic apparatus, radiation apparatus, and imaging parts and accessories.
- Patient aids: This segment mainly depends on orthopaedic and prosthetics, portable aids, wheelchairs, and hospital furniture and these contribute to a small amount of the total market share.
- Consumables and implants: These are devices that are used internally or for injecting into the patient, such as syringes, needles, catheters, bandages, suturing materials, etc., and a percentage of it contributing to the total market share is managed by these devices.
Push factors for growth
- India’s population and life expectancy: It is expected to reach 1.45 billion by 2028, making it the world’s most populated country. Life expectancy in India is anticipated to rise to 70 years by 2025, up from the current 67.5 years.
- Disease Burden Shift: In India, non-communicable diseases (NCDs) account for half of the disease burden and 60% of all deaths.
- Preferences changes: Increasing health knowledge, a shift in attitudes toward preventative healthcare, and an increase in the occurrence of lifestyle disorders
- Increasing Disposable Income: By 2026, 8% of Indians will earn over $12,000 per year. Over the next ten years, 73 million Indian households will enter the middle class, increasing their purchasing power, including in the area of medical devices.
- Health insurance reforms: About 20% of Indians are covered by health insurance. With increased affluence and urbanization, this number is anticipated to rise.
- Medical Tourism: It is on the rise in India, because of the relatively low cost of medical care. It contributes more than $2 billion to India’s healthcare market.
- Infrastructure Development: India is planning for more medical device parks. It has a dedicated PLI Scheme in this regard.
- Policy Support and Incentives: 100% FDI authorized in Greenfield and brownfield projects, lower entry hurdles than other industries, and a varied and vibrant start-up ecosystem.
- Make in India boost: The medical device industry in India attained independent status after the launch of the “Make in India” program in 2014 under the government scheme.
Technology surge and medical devices
- Big Data: Medical devices provide enormous amounts of vital, timely data that can have a big clinical impact. Predictive analytics models based on ‘Big Data’ can assist physicians get helpful insights while also improving the quality of care and patient outcomes.
- Wearable Devices: Due to their ease of use, wearable such as glucose monitors, exercise trackers, and wearable for mental health are becoming increasingly popular among Indian customers.
- Surgical Robotics: Robotics is one of the most fascinating and rapidly increasing areas of healthcare, with potential innovations ranging from robot companions to exoskeletons. In healthcare, robot companions can help alleviate loneliness, cure mental health difficulties, and even assist children with chronic illnesses.
- Startups: India has around 250 active medical technology startups. Between 2011 and 2020, Indian health-tech and digital health startups raised over $2 billion, including 500+ investments into 340+ companies. Over the last decade, there have been more than 70 successful exits.
- Home Healthcare: This has the potential to save up to 65 percent of unnecessary hospital visits in India while also lowering hospital expenditures by 20%. By 2027, it is predicted to increase at a CAGR of 19.2%, reaching $ 21.3 billion.
Regulatory mechanism in India
- Legacy laws: After 1970 the government took control through the Indian Patent Act 1970 and Drug Price Control Order and gradually Indian companies started emerging.
- Regulatory authorities: The Government of India has introduced Medical Device Regulation which has the task to regulate the manufacturing and marketing of medical devices and the authorities governing it are:
- Central Drug Standards Control Organization: Main regulatory body for pharmaceuticals and medical devices
- Drug Controller General in India: He/She is the crucial official under CDSCO
- Drugs & Cosmetic Act and Rules: This governs the manufacture, import, sales and distribution of medical devices
Various challenges to this sector
- Quality assurance: India has only 18 certified medical device testing laboratories that have been approved by the CDSCO and that is grossly insufficient keeping in view the size of the country.
- Demand-supply gap: There is a huge gap in the current demand and supply of medical devices in India and this provides a significant opportunity for manufacturing devices in India.
- Nascent industry: Around 65 percent of Indian manufacturers are domestic operators in the consumables sector, catering mostly to domestic consumption with negligible exports.
- MNC monopoly: With vast service networks, large multinational corporations dominate the high-tech end of the Medical Devices industry in India.
- Overpricing: To substantiate, let’s consider the example of stents or knee or hip implants. This needs no explanation!
- Medical Device Parks Promotion Scheme: The government has approved the establishment of four medical device parks to offer shared infrastructure, build a healthy ecosystem for medical device manufacture, and lower manufacturing costs.
- Production Linked Incentive (PLI) Scheme: The PLI scheme for Promoting Domestic Manufacturing of Medical Devices and for Pharmaceuticals (PLI 2.0) were introduced to help India achieve its goal of becoming a worldwide medical device manufacturing powerhouse.
- Draft National Policy for Medical Devices, 2022: The Medical Devices Rules (MDR) 2017 govern clinical research, manufacturing, importation, sale, and distribution of medical devices. The gadgets are divided into four categories in accordance with international standards.
- QA mechanism: In June 2021, the Quality Council of India (QCI) and the Association of Indian Manufacturers of Medical Devices (AiMeD) launched the Indian Certification of Medical Devices (ICMED) 13485 Plus scheme to undertake verification of the quality, safety and efficacy of medical devices
Need for a concrete policy
- Policy vacuum: India’s medical devices sector has so far been regulated as per provisions under the Drugs and Cosmetics Act of 1940, and a specific policy on medical devices has been a long-standing demand from the industry.
- Meaningful expense on R&D: The policy also aims to increase India’s per capita spend on medical devices. India has one of the lowest per capita spend on medical devices at $3, compared to the global average of per capita consumption of $47.
- Reducing import dependence: With the new policy, the government aims to reduce India’s import dependence from 80 per cent to nearly 30 per cent in the next 10 years.
- Becoming a global hub: It aims to become one of the top five global manufacturing hubs for medical devices by 2047.
- Domestic manufacturing of high-end products: Indian players in the space have so far typically focussed on low-cost and low-tech products, like consumables and disposables, leading to a higher value share going to foreign companies.
- Infrastructure boost: Having adequate common infrastructure including accredited laboratories in various regions of the country for standard testing will significantly encourage local manufacturers to get their products tested for standard.
- Surveillance System: There is a dire need for developing a robust IT-enabled feedback-driven post-market surveillance system for medical devices to evaluate their efficiency.
- Validation Centre: Setting up government-run, common medical device testing facilities in PPP mode for testing/evaluating medical devices.
- Skill Development: There is a need to set up committees and representation through the National Institutes of Pharmaceutical Education and Research (NIPERs) and the Healthcare Sector Skill Council.
- R&D: Development of incubation centres, setting up an IP exchange where technologies can be showcased and licensed for commercial benefits.
- Synergy with State governments: Health Ministry needs to work in synergy with State governments and impart the necessary skills to the local medical device officers and also devise a mechanism.
- 3As: Accessibility, availability and affordability must be at the core objectives for focusing on self-sustainability, innovation and growth in the medical devices sector.
With inputs from: