India is the 4th largest medical device market in Asia after Japan, China and South Korea. In fact, the Indian healthcare segment has become one of the India’s largest sector both in terms of revenue and employment. It is estimated that India will need more than 2 million doctors by 2030 in order to achieve the doctor to population ratio of 1:1000.

The rise in per-capita income in India, greater health awareness among the masses, lifestyle diseases and increasing access to insurance (both private and government schemes) will contribute to a national healthcare market size of Rs 24,18,000 crore by 2022 ( approx $372 billion) which is growing at a CAGR of 16-17% since 2008. In addition, the medical device market is expected to be at Rs 71,500 crore by 2022 (approx $11 Billion). The Indian government also aims to increase the health expenditure to 3 % of the GDP by 2022.

Opportunities and Challenges in Indian Healthcare

The Indian healthcare space is teeming with challenges, thus providing opportunities for development. Rural India is in need of huge infrastructural development in the healthcare space. Today, the rural population has to rely on the metro cities to fulfil their healthcare requirements. Although, there has been a significant development in the Tier-2 & Tier-3 cities, yet India has a long way to go as it still requires 3 million additional beds to achieve the target of 3 beds per 1000 people by 2025. These facts imply that there is a huge opportunity in the country’s healthcare sector.

Besides, infrastructural development and qualified doctors, India also requires around 2.4 million qualified nurses as there is a lack of quality paramedical training centres. This denotes a massive opportunity to build medical infrastructure and teaching institutions like Nursing Colleges / Bio-medical colleges / Medical colleges. Similarly, the country provides immense opportunity for research firms which can help in developing new drugs at a cost which is 40% lower than the US. As per DCGI data, clinical trails in India has also seen a tremendous growth of about 400%.

A close observation will show that India, in a very slow and steady pace, is becoming a hub for medical tourism as it is providing quality healthcare at one-tenth the cost of the developed countries which can act as a leeway for entrepreneurs to explore the market. Furthermore, the Indian government, is encouraging micro, small and medium enterprises to develop medical devices by giving a price benefit of up to 10% in government tenders so as to reduce the dependency on developed countries for critical medical device technology.

India’s position in Healthcare sector

According to the medical journal, Lancet, which published data from the Global Burden of Disease report, 2015, said that India ranked 154 out of 195 countries in terms of access to healthcare. However, now it has improved its ranking on a global healthcare access and quality (HAQ) index to 145 in 2016. Yet, it ranks lower than neighbouring Bangladesh and even sub-Saharan Sudan and Equatorial Guinea. In fact, despite improvements in healthcare access and quality, India lags way behind its BRICS peers on the HAQ index, except China. It has been noticed that countries that spent more on health per-capita has scored higher on the HAQ index. At present, India spends just 1.4 % of its gross domestic product (GDP) on health and the World Health Organisation recommends countries to spend 4-5 % of their GDP on health to achieve universal healthcare.

Centre’s Contribution in Healthcare

The Central government has taken various steps to ensure the significance of various segments in the Healthcare domain which includes medical devices, drugs etc. A task force was constituted to implement a range of recommendations, including the segregation of medical devices from drugs. These new rules shall thus enhance ease of doing business and ensure availability of quality medical devices. Also, for the very first time, periodic renewal of licenses will not be required. Consequently, manufacturing and import licenses will be valid until it is suspended or cancelled. The rules also aim to promote a culture of self-compliance by manufacturers of medical devices. In addition, the manufacturing licences for certain medical devices are granted without prior audit of the manufacturing site. In such cases, the manufacturer has to do self- certification of compliance with the essential requirements and on the basis of such certification, the licence will be issued.
In 2017, the government also approved the National Health Policy, which envisages the realisation of quality healthcare through both promotive and preventive practices. One of the most critical policies is the ‘Draft National Medical Device Policy, 2015’ that was proposed to strengthen the medical devices sector by reducing dependence on imports, thereby giving impetus to the ‘Make in India’ initiative. Under this Policy, a single-window mechanism will be provided to the industry to not just focus on self-reliance, but also work towards making India the global hub of production in medical devices. Additionally, the Policy envisages interest subsidy for MSMEs, concession on power tariffs, seed capital and minimum or zero duty on raw materials, among others. Currently, the policy is awaiting inputs from stakeholders and their validation.
Currently, in India there are about 850-900 medical device manufacturers and the segment-wise share of the Indian medical device market valued at $4.9 Billion in 2017 are as follows:

i) Diagnostic & Imaging : 30%
ii) Consumables : 16%
iii) IV Diagnostics : 10%
iv) Patient Aids : 9%
v) Ortho & prosthetics : 7%
vi) Dental products : 3%
vii) Others ( patient monitors / ECG/ oxygenators / ventilators etc ) – 24%

Now, with the liberalization of government policies, allowing up to 100% FDI in the medical device segment, several manufacturers are not only setting up bases in India to provide country-specific products but are also looking to export from India to other parts of the world. Some instances include Becton Dickinson’s plant in Haryana, Philips Medical System’s acquisition of Medtronics. As of now, India’s import dependencies are as follows:

i) Consumables – 60% Local / 40 % Imports
ii) Equipment – 10% Local / 90 % Imports
iii) Implants – 25% Local / 75% Imports
iv) Patient Aids – 15% Local / 85% Imports

In June 2018, the Government of India launched a health informatics platform which can provide reliable, accurate and relevant national health information called National Health Resource Repository (NHRR).

Start-ups in the Healthcare Space

In the last 5 years we have seen the developments of indigenous cath labs and ortho implant centres. In fact, a number of start-ups have mushroomed in the last 5 years to fill up the space in Indian healthcare and one of the best examples is Meril Healthcare who started off in Gujarat as Stent suppliers and is now present in almost all sectors of healthcare. Start-ups who are part of the healthcare industry are quite fortunate as it is evolving all the time, thus giving them immense opportunity to not only garner business but also contribute for the betterment of mankind through innovation. This will ensure a strong, sustainable and technically sound domestic healthcare industry with high quality products and affordable pricing.