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Medical Devices: Pillar of Healthcare Services

June, 2017

CFO Insights in conversation with Sushobhan Dasgupta, Managing Director, Johnson & Johnson Medical India, and Vice President-Orthopedics, J&J Asia Pacific, on how innovation in medical devices is improving healthcare services   

Given the emphasis on achieving Universal Health Coverage, what specific interventions are required to make it a reality in India?

In today’s changing times characterized by key health related challenges such as the rise of anti-microbial resistance, rapidly burgeoning burden of non-communicable diseases and catastrophic out-of-pocket costs at the patient level, we need to look at Universal Health Coverage from a holistic standpoint and focus on the 4 ‘A’s of healthcare: Awareness, Affordability, Access and Adoption through the 5 ’P’s: Patients, Providers, Physicians, Payers, and Policymakers. 

- Awareness: In India, cardiovascular diseases, cancers, diabetes, and other NCDs (Non–Communicable Diseases) are estimated to account for 60% of all deaths, making these the leading causes of death in the country. However, according to Indian Council of Medical Research’s India Diabetes Study, only 43.2% of the overall study population knew about diabetes; a condition that affects around 69 million people in India today. Thus, educational initiatives through collaboration across the 5 ’P’s can be a key component for enhancing prevention, treatment and control of diseases like diabetes for Patients. Public-Private partnerships can play a huge role in spreading the right degree of awareness and education in India.

- Affordability: The 2017 National Health Policy’s directives of increasing public health care spending from 1.15% to 2.5% of GDP, setting up AIIMS like institutions in every state and enhancing healthcare financing are laudable steps in tackling the affordability barriers. Policymakers should work towards enhancing insurance coverage in high burden disease areas such as morbid obesity management, cancer, cardiovascular and lung diseases as the industry works towards market appropriate innovation. The Government needs to look at some form of mandatory social health insurance for all taxpayers as well to create a well-reimbursed healthcare system in India rather than depending heavily on private out of pocket spend on healthcare. 

- Access: This requires collaboration between the providers and policymakers (the Government, private players and healthcare companies) to reach the most vulnerable people with quality medicines, healthcare technologies and services. Quality public health facilities should be set up in the semi-urban and rural areas to make quality healthcare services available near people’s homes, so they don’t need to travel miles to access it. There should be products available to cater to various segments of the society for us to move away from only a socialistic mindset towards a broader democratic way to cater to patients. Johnson & Johnson India has been working with various NGOs and governments, and adopting various flexible business models to improve access to our products and services across the nook and corners of India. 

- Adoption: Along with infrastructure and technology, skilled healthcare professionals are equally important for the right adoption of these technologies. With only 7 doctors for every 10,000 individuals, the demand for well-trained physicians in India far outstrips the current supply, especially given the country’s health challenges. This is where continual education for healthcare professionals plays a crucial role in upskilling and helping healthcare professionals acquire knowledge on advanced technologies and surgical techniques for superior patient outcomes. Johnson & Johnson India has been working actively to train and skill healthcare professionals through its education institutes and partnerships with medical colleges, surgical associations and healthcare professionals. To date, we have trained more than 250,000 health care professionals in various specialties.

Imports constitute approx. 70% of the Indian medical devices market. Why has domestic manufacturing not taken off in India? Can the ‘Make in India’ initiative contribute towards accelerating manufacturing?

From any company’s point of view, the domestic consumption levels need to be reasonable enough to provide economies of scale and to be considered a serious priority as a manufacturing base. We also need to look at a country’s regulatory environment including harmonization with global standards, taxations, incentives, state-level policies, availability of infrastructure etc, while considering an investment decision. When the above factors get to a certain tipping point, the domestic manufacturing would take off which is not very far off. We need to show a bit of resilience and patience here.

Johnson & Johnson India enjoys a strong footprint starting way back in 1958 with 4 state-of-the-art manufacturing facilities, 5 offices and various distribution centers across the country. 90% of our consumer products, 30% of our medical devices products and 70% of Ethicon sutures are manufactured locally. Johnson & Johnson India is now constructing a greenfield project in Telangana. We have a pharma R&D centre in Mumbai and a Business Knowledge Centre in Pune. In addition to this, we run three Ethicon Institutes of Surgical Education (EISE) and help train 65,000 healthcare professionals every year. 

With expansion of healthcare in urban, semi-urban and rural markets that have huge unmet demand for affordable medical devices, what is your go-to-market strategy to tap into these markets?

With growing incidence of non-communicable diseases, rising incomes, increased number of hospital beds and more informed patients, there is a larger demand for quality healthcare in the urban, semi-urban and rural areas. At Johnson & Johnson Medical India, we have embarked on a new go-to-market model – Middle India to enhance access to our innovative medical technologies for patients and customers in these areas. We have formed a unified sales force called ‘One J&J medical field force’ and the members of this force sell all the products and services of the company to medical practitioners and health care facilities. With this we are reaching several hospitals and large number of patients located in far flung smaller tier 2, 3 & 4 cities.

There is also a dire shortage of skilled healthcare professionals in tier-II and tier-III and IV towns. Understanding the need for continued medical education, Johnson & Johnson has modeled innovative education platforms by leveraging digital technology such as telementoring and innovative doorstep professional education to doctors in more than 400+ tier I and tier II, III and IV towns.   

What are the innovations in the Medtech sector that are disrupting your business? Are you looking to acquire these technologies or build in-house capabilities?

Johnson & Johnson Medical India has been at the forefront of medical innovation and creating value for patients in India. Our innovation strategy has delivered transformational products for patients and also created a cycle of success that positions us for continued growth. It has led to advances of novel products and technologies in key areas like general and specialized surgery, orthopedics, cardiovascular disease, neurosurgery, and infection prevention.

Looking ahead, Johnson & Johnson Medical plans to further prioritize and accelerate innovation in other high-growth areas, including robotics, endocutters, and solutions that address unmet needs in “priority disease states,” such as cancer, obesity, diabetes, and trauma. Recently, Johnson & Johnson announced that Ethicon, a medical device company within the Johnson & Johnson family of companies had signed an agreement to enter into a strategic collaboration with Google, Inc., and work with the Life Sciences team on advancing surgical robotics to benefit surgeons, patients, and health care systems.

Patient-specific customized implants are being designed using technology to help patients with issues like facial reconstruction.

Apart from product innovation, we are also working on innovative access models such as e-learning for upskilling healthcare professionals in remote areas and use of e-commerce to enhance the availability of our medical technologies.

What are the sub-categories within the Indian healthcare and medical device market, wherein Johnson & Johnson intends to be the market leader?

At Johnson & Johnson Medical India, patients are at the center of everything we do. For the last seven decades, we've been privileged to play a role in helping millions of people in India be well and stay well through our array of cutting edge healthcare offerings for continuum of care.

We have brought many innovative advanced medical technologies to address pressing unmet medical needs of Indian patients in areas such as Cancer Surgery, Obesity, Diabetes, Orthopaedics, Infection Prevention, Cardiovascular Disease, Coronary Artery Disease, Peripheral Vascular and Obstructive Disease, Neurovascular Disease, Arrhythmias, Vision Care, General Surgery, Urologic Surgery, and Hernia Surgery.

Today, Johnson & Johnson Medical India is the largest in medical devices in India, touching lives of around 40 million patients every year. Looking ahead, we will continue to invest in bringing innovative medical technologies in the country, drive access for patients and maintain our leadership position.

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