India’s medical technology (MedTech) device sector mainly comprises SMEs and MNCs (multinational companies), apart from some service network enterprises. The sector can be categorised into five major segments, including dental products (8 per cent), orthopaedic (12 per cent), consumables and disposables (17 per cent), diagnostic products (31per cent) and other equipment (32 per cent).
According to a joint study report by ASSOCHAM-MRSSIndia.com, the MedTech device sector in India is projected to reach INR 55,040 crore by 2020 from INR 26,048 in 2018, registering a CAGR (compounded annual growth rate) of 15 per cent. Currently, manufacturing in the MedTech sector is limited to consumables, and imports still dominate the Indian market.
Siraj Dhanani, Founder and Chief Executive Officer, InnAccel Technologies—a Bangaluru-based MedTech company that develops cutting-edge devices across intensive care, mother and childcare, and ENT segments—speaks with smefutures.com to discuss the various aspects of this indispensable sector for the healthcare market in India.
Q1. Please tell us about the basic requirements for developing newer techniques in the medical technology sector?
In the MedTech sector, laboratory and research infrastructure is critical to enable technical innovation. This includes product design and prototyping tools (like 3D printers), electronics and mechanical engineering labs, along with testing and validation facilities. These are expensive resources and are a big constraint today on MedTech innovation in India.
In terms of other resources, substantial funding is also needed—anything from INR 7 to INR 70 crores—for the development, necessary certification and market launch of any new product. These resources could vary, from government bodies such as the Department of Biotechnology to international foundations such as the Gates Foundation, USAID and so on. However, a major chunk of the funds needs to come from the private sector in the form of venture capital (VC). In India, the MedTech sector lacks adequate VC funding as very few VC funds are actively investing in this sector. This could be attributed to relatively long timelines in developing a new product and achieving commercial success, which can take up to 10 years.
Q2. Kindly tell us about the clinical trials, testing and subsequent approval scenario in India. How is this process different for SMEs as compared to the drug trials for big players?
Unlike drugs, most MedTech products, such as devices, diagnostic kits and the like, do not require clinical trials for approval, so clinical trials and testing are usually done to support claims of efficacy and safety during commercialisation of the products.
Clinical trials have a robust review and approval mechanism in India. All clinical trials have to be approved by the hospitals’ Institutional Ethical Review Board (IERB) and registered with the Clinical Trials Registry of India (CTRI) before initiation. Ethical guidelines must be strictly followed during the conduct of the trial. The process does not differ much for SMEs and big companies; however, the size and scale of the trials may be different due to the available resources for investment into trials.
Q3. How have the newer selling platforms changed the dynamics of this business—retail products specifically?
Most MedTech products are sold to hospitals, where these are used across patients in the delivery of care (for example, ventilators and CT scanners), or are used individually per patient (needles, stents, etc). Because these products are not sold to retail consumers, these new technologies have not significantly changed the dynamics of this business.
Q4. How do the operations and challenges vary with demography—like medical facilities in Tier 1 and Tier 2 cities, and locations within a city?
India has varied overall quality of healthcare, from infrastructure, equipment availability, service network, skill levels and staffing points of view. As a result, some products may fit certain segments of the market, while others may not. This leads to specific product segments being targeted for specific market niches.
Q5. Please tell us about the maintenance and servicing hassles across the product segment?
Service is a critical part of any MedTech business. While professional service partners are available to MedTech companies across India, these teams tend to be concentrated in Tier 1 cities only. Service and maintenance continue to be a challenge in Tier 2 cities and lower segments, with the result that more than 50 per cent of the equipment in their government facilities remain non-functional. Therefore, MedTech products made for India need to be robust, infrastructure-independent, and easily operable and serviceable.