A leap for the medical device 'sunrise' sector
The medical device market in India is presently valued at approx. 5.2 billion USD (of ~100 billion
The country’s medical device sector is basking in the sun. According to some estimates, the medical device market in India is presently valued at approx. 5.2 billion USD (of the ~100 billion USD healthcare market in India), and is growing at a CAGR of 15-16%. It is believed to reach 50 billion USD by 2025. Increase in non-communicable diseases, ‘Ayushman Bharat’ Yojana and an aging population are some of the key demand drivers. It is only pertinent that India answers this skyrocketing growth with required support, regulations, laws and infrastructure.
‘Medical devices’ are an indispensable and integral part of healthcare, with a significant role in diagnostics, treatment and rehabilitation. Devices are directly procured by hospitals and healthcare providers for patient diagnosis and use. Yet, even amongst qualified health personnel, expertise and in-depth knowledge on application, operation, adverse or long-term effects is still extremely limited. The gap widens in direct proportion to the complexity of a device. It also further widens from an urban to rural setting, where most healthcare providers are unqualified practitioners.
Price is key for import-dependent India
The prices of most medical devices sold in the Indian market are unaffordable for the common man due to India’s high import dependency, up to 70 per cent, and steep trade margins. A recent industry analysis reveals that the import of medical devices in India have gone up by 24 percent in FY19 to `38,837.28 crore, higher than the previous three years. These imports are primarily from United States, Germany, China, Netherlands and Singapore. To make devices affordable and within reach of the common man, price control has been fostered as an elementary approach. A right balance needs to be achieved between price control, quality care and innovation.
Additionally, a substantial dependence on other countries for essential and life saving devices and medical products could spell a health emergency if such international ties disrupt. A nuanced approach would be to encourage manufacturing within the country. Increased supply, fair competition, rational margins and supervision by the government can aid in affordable and accessible devices.
Medical devices range from low cost and simple products like needles, syringes, etc, to high cost and complex ones like rehabilitation equipment, in-vitro diagnostics, radio-diagnostics, implants, etc. India’s major import dependency, especially in such high-end electronics and diagnostic equipment has to be addressed. Most indigenous manufacturers are MSMEs with an average investment of `170–`200 million with a turnover of `450–`500 million.
Reorganise, regulate and replenish
In India, the regulatory approach continues to be in the nascent stages. So far, ad-hoc measures have been taken to regulate a few of these as ‘drugs’ (to make it easier to gauge efficacy). While the medical device industry has time and again stressed on the need for a discrete and clear definition of medical devices and related regulatory provisions, the matter continues to be ignored.
So far only 23 medical device categories and products have been notified and regulated by the government by different parameters - safety, performance and quality as per the Drugs and Cosmetics Act 1940 and the Medical Device Rules 2017. The notification of these rules, and classification as per risk category saw notified bodies formed, and it was seen as a ray of hope. However, in the absence of a discrete legislation, the new rules fell short of regulating the entire gamut of devices being developed, manufactured and sold.
Device a law to regulate quality
The recent Johnson and Johnson Hip implant case and the International Consortium of Investigative Journalists (ICIJ) Implant files (where the consortium of journalists led a global investigation revealing the rising human toll of lax controls on medical devices) are apt examples which have brought the regulation of devices under the scanner not just in India but globally too. Especially since European authorities and the US FDA have always been considered beyond reproach.
Since March 1989, when three medical devices were for the first time notified and regulated as ‘drugs’, the medical device sector has been regarded as a sunshine sector. It has witnessed a partisan divide to formulate and implement a separate adequate legislative provision. In the absence of such a provision, the absence of a regulatory structure (which emphasises on the use of quality medical devices) is both worrying and shocking. Such unregulated devices are free to be imported, manufactured, refurbished, reused and sold in the country with limited-to-no control. Flawed, faulty or otherwise.
The devices all vary in complexity be it materials, engineering, risk, testing/trial requirements; They require different skill sets, expertise and training. With different manufacturing, usage and regulation, unique testing and calibration systems too. To ensure conformance to quality, safety parameters and distinct clinical trial pathways for different category of devices is of utmost importance.
Legislation and infrastructure
Fostering India’s ranking in the ‘Global Ease of Doing Business Index’ with an aim to achieve ‘Universal Health Coverage’, concrete steps to provide key enablers in the indigenous medical device industry aid to help leap frog and keep pace with global advancements is compelling. To achieve this, a two-point approach can be adopted:
Firstly, a robust and distinct provision in our legislation for medical devices encompassing patient safety, reliability and standardisation needs to be fast tracked. Healthcare providers and the government (as a buyer) must vouch for only regulated devices. A separate legislation with a well-defined governance structure will enable predictability in the industry and infuse confidence in investors, manufacturers and researchers. It will encourage exports and help reach out to international markets, thereby reducing import dependency. This, in turn, will pass on the cost benefits to the ultimate end users - the patients by decelerating healthcare costs.
Yet, having a separate regulatory structure is not enough. The lack of even basic infrastructure and a supportive ecosystem at each level before the device reaches the end user must be initiated.
Secondly, a critical measure is to establish a dedicated end-to-end ecosystem which enables the translation of ideas and research for a user friendly, safe, high quality and ready to use product.
As industry facilitators, with these strategically located med tech zones, bolstered through co-operative federalism and public private partnerships, diverse benefits will ensue, and it will be expedient for the development of the national and state economies.
These twofold measures can catapult the ‘Sunrise’ medical device sector over the next decade. They can become the foremost enablers for #Make in India, #Ease of Business, #Universal Health Coverage and #Accessible, affordable, quality healthcare.