Med Tech

Med Tech

With the second-largest population in the world, healthcare is amongst the largest and most important sectors in India’s rapidly growing economy today. There has been strong growth in hospital infrastructure, and technology deployment, and India has become a global hub for international medical tourism.

According to a report by the Department of Industrial Policy and Promotion (DIPP), India’s healthcare market is expected to cross USD 372 billion by 2022 as a result of greater spending power, health awareness, a rise in non-communicable diseases, and increasing access to insurance.

However, there are significant shortfalls in India’s healthcare system, the most prominent of which is the chasm between private and public healthcare. While the private sector boasts some of the best doctors and facilities in the world, the public system, which caters to a majority of our population, suffers from acute shortage of doctors, medical staff, infrastructure and appropriate technology.

Medical Technology (MedTech) is a fast-growing sector in Indian healthcare, expanding 15 to 20% annually, and is expected to reach USD 25 billion by 2025. This sector includes everything from sutures to stents, X-Ray machines to CT scanners, hospital beds to robotic surgery systems.

Medical technology can be especially effective in addressing the significant gaps and challenges faced by the Indian healthcare sector, and drive strong improvements in healthcare outcomes .

MedTech Innovation in India: The Story so Far

So far, India imports over 75% of its medical devices, which have been designed, developed and priced for Western markets and healthcare systems. Indian innovation in this sector has been restricted to incremental alterations - i.e. improving features or reducing cost of existing product concepts or copying innovation launched by MNCs.

However, true innovation - which involves creating a novel technology and product to address a healthcare need in the Indian context, has been missing so far, primarily because the high cost and time in developing such technologies has deterred entrepreneurs.

However, the last few years have seen a blossoming of such innovation in India- primarily due to strong grant funding through the Dept of Biotechnology, for MedTech projects. Innovators are working to create novel solutions to address challenges from labor monitoring, neonatal respiratory support, hypothermia management, and asphyxia, automated screening for various cancers and ophthalmic conditions, and lung infection in patients on a ventilator.

Such solutions can hugely benefit the public healthcare system, which disproportionately bears the burden of these challenges with their poor infrastructure and strained resources.

The Path Ahead: Challenges Galore

Several innovations mentioned earlier have been launched in the Indian market, with varying degrees of commercial success. Given the fragmented nature of the private market, it is difficult and time consuming to attain scale in this market.

Another key challenge facing such MedTech innovators is public procurement. Very often, these innovations address challenges seen in the public healthcare system, which should be their target market. However, public procurement in healthcare is a long and tortuous process, with various hurdles in the way of a new innovator.

One such hurdle is that the main mode of government procurement - tendering for a defined product. Choosing from amongst multiple bidders on price, does not work for an innovative product that is owned and made by just one company. MedTechinnovators, solving public health problems, need a defined procurement mechanism for such innovations (maybe certified by the government as nationally important through a review mechanism) that allows them to swiftly sell to the government. This can have a salutary effect on spurring further MedTech innovation, and bring about a dramatic improvement in healthcare outcomes for the majority of our fellow citizens.

Funding for MedTech innovation has increased tremendously over the years, both in grant funding (through DBT and International foundations), and slightly more slowly in equity funding by VCs and angel investors. While a lot more money flows to digital and consumer startups, MedTech startups have been getting increasingly funded by VCs with a 5-7 year time horizon. This augurs well for the sector, and such funding should only increase once we have a few successes in this sector.

Innovations made for India will also serve larger markets across Asia, Africa and South America. Innovators today do not know how to tap these markets and frequently do not have the resources to register and certify their products in each of these countries before commercialisation. Strong support by the government on this front can also help take Indian innovations beyond our shores, and make India the MedTech innovation hub for global emerging markets over the next decade.