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Medical Disposables:

Current Challenges & Future Growth Potential

D L Pandya, CEO & Editor
Medical Plastics Data Service

Medtech India 2013
October 3, 2013
Presentation Overview
Regulatory Scenario
About Medical Devices
Fundamental Differences between Drugs And Medical Devices
Industry Scenario: Global, Asia & India- Overview
Indian Medical Device Industry: SWOT Analysis
Challenges Facing Indian Medical Device Industry
Roadmap For Future Growth
Regulatory Framework, Innovations and R&D, Creating Affordability,
Collaborating With Healthcare Service Providers, Industry - Academic
Institute Linkages, Manufacturing Landscape, Exports, Medical Device
Clusters, Skill Development, Pricing Strategy, Reimbursement Mechanism

Medical Technology: Definition
As Per The Tabled Drug & Cosmetic Bill (Amendment) 2013

Medical devices are expected to be defined as per GHTF which defines Medical
device as any instrument, apparatus, implement, machine, appliance, implant,
reagent for in vitro use, software, material or other similar or related article which:

is intended by the manufacturer to be used, alone or in combination, for human
beings, for one or more of the specific medical purpose(s) of diagnosis, prevention,
monitoring, treatment or alleviation of disease, supporting or sustaining life,
providing information by means of in vitro examination of specimens derived from
the human body.

does not achieve its primary intended action in or on the human body by
pharmacological, immunological or metabolic means, but which may be assisted in
its intended function by such means.

Huge Range of Products
About 1.5 million different devices
Consist of 900 product groups
covering 50 clinical specializations
Broadly classified as
Diagnostic devices:
Testing kits and reagents
Therapeutic devices:
Disposables & Re-usables
Fundamental Differences Between
Drugs And Medical Devices
Pharmaceutical Product

Industry with long
historical background
Industry is comprised
primarily of multinationals
Medical Technologies and

Relatively young, very
diverse industry
Industry is made up of a
few large companies and a
large number of small and
medium-sized companies.
Fundamental Differences Between
Drugs And Medical Devices
Medical Technologies and

Generally based on
mechanical, electrical and
materials engineering
Designed to perform
certain functions based on
quality, safety and
Pharmaceutical Product

Based on pharmacology
and chemistry. Now
biotechnology, genetic
engineering, etc.
Product development by
trial and selection on
basis of quality, safety and
Fundamental Differences Between
Drugs And Medical Devices
Medical Technologies and

Generally act by physical
Continuous innovation
and iterative
improvements based on
new science, technology
and available materials

Pharmaceutical Product

Biologically active:
effective when absorbed
into the human body
Continuous innovation
and some improvements
based on new science
and technology
Fundamental Differences Between
Drugs And Medical Devices
Medical Technologies and
Short product life cycle and
investment recovery period
(typically 18 months on the
The majority of new
products typically bring
added functions and
clinical value based on
incremental improvements
Pharmaceutical Product

Extensive product life
cycle and long
investment recovery
Long investment
recovery period
Fundamental Differences Between
Drugs And Medical Devices
Medical Technologies and
High distribution and training
education costs and
requirement to provide service
and maintenance (for high tech
Often integral to clinical
procedures, so user training
and education are essential for
safe and effective use
Pharmaceutical Product

Low distribution cost,
and, in most cases, no
service or maintenance
Training required for use
much less intensive than
for high tech devices
Medical Device Markets - The Growth
set to Accelerate Global v/s India
The healthcare delivery system is under tremendous
pressure to identify and commercialize simple medical
solutions quickly to lower costs, control infections, reduce
liability and eliminate preventable errors. The trend toward
more user-friendly home health care products will also spur
the demand for innovative medical devices.

With the convergence of scientific, electronic and digital
technologies; new breakthroughs in medical devices will play
a critical role in solving the problems in healthcare and
enhancing the human condition. Innovation is the life-blood of
the industry.
Medical Device Markets - The Growth
set to Accelerate Global v/s India
It is likely that by 2015, the medical devices industry in
APAC will be looking at a growth rate almost double that of
the rest of the world, signifying exciting times ahead indeed
for Asia Pacific.

"Some of the market restraints that APAC will have to
address include regulatory and reimbursement hurdles, lack
of sufficient distribution networks and inadequate
training/certification for allied staff.
Outsourcing of Medical
Products to Asia
In turn, many citizens are demanding higher healthcare
standards and services.

Most Asian governments are striving to improve their
healthcare in order to meet these domestic demands.

They are also placing greater importance on international
standards and regulations to improve the quality of their
medical device market.
Outsourcing of Medical
Products to Asia
About outsourcing

Asian countries such as China and India are constantly
striving to raise their medical device standards and
regulations in order to attract more foreign companies.

In April 2005, India and the United States even signed an
open skies agreement, deregulating flight restrictions and
allowing for increased air travel between the two countries.
As long as Asian countries continue to offer advantages-
whether by improving production efficiency or by reducing
costs - U.S. medical companies will continue to outsource to
Outsourcing of Medical
Products to Asia
About outsourcing

To take advantage of lower costs and specialized
manufacturing capabilities, more and more medical device
companies will eventually follow this trend, too.

The truth is that once one company in an industry begins
taking advantage of global outsourcing, other companies must
follow suitif only to stay competitive. After all, if Company A is
experiencing strong benefits from outsourcing, it is likely that
Company B will as well.
Outsourcing of Medical
Products to Asia
About outsourcing

Outsourcing manufacturing has raised strong political
concerns about the loss of American jobs.

However, in a global economy, it is generally advantageous
for companies to perform different tasks in different locations.

For instance, in the automobile industry today, various parts
are made at different factories and then assembled at one or
more locations.
Medical Device Markets :
Indian Scenario
Healthcare visionary, Jerome H. Grossman, has noted that
Given the fundamental forces for change in health care, we
have reached a tipping point in medical services delivery.
Rapid change is inevitable.

It is an opportune time to seek and commercialize
innovation from the medical profession and bring it to the
gatekeepers in medical supply to solve the problems more
Healthcare Market In India : Overview
In spite of global downturn, growth far better than its
other industrial counterparts
Regarded as one of the fastest growing sectors in India
Driven largely by :
increasing penetration of healthcare across the country,
A growing lifestyle disease burden, and
Continued leveraging of India as a cost effective
manufacturing base
Large scale Imports
Healthcare Market In India : An Overview
Share of different categories:
Medical, Dental & Surgical equipments : 40%
Plastic Disposables : 25-30%
Implants : 20-25%

Growing awareness about health, new technological
innovations in the areas of diagnosis and Treatment,
increasing old age population, changing disease patterns
(blood pressure, hyper tension etc) towards the ones
requiring long term treatment etc are some of the factors
leading to growth of the industry.
GHTF Classification 4 Classes
A Low Risk
Surgical instruments /
diagnostic kits
Minimal to NIL
Low moderate
Hypodermic Needles / suction
equipment, instrumentation
Manufacturing QS
to Verification of
C Moderate-high
Lung ventilator / Orthopaedic
implants, blood bags
Verification to
D High Risk Heart valves / Implantable
defibrillator / Shunts
Indian Medical Devices Industry
Revenues by Major Market Segments
Total Medical Devices Industry: Percent of Revenues by Segment (India)

Segment Revenues (%)
Diagnostic Imaging 17
General Surgery 47
Clinical Instrumentation 09
Critical Care 05
Self-Care 05
Cardiac Surgery 04
Ophthalmology 04
Urology 02
Others 08
Overview To Healthcare Market In India
Healthcare Market Segmentation(CII-Grant Thornton
Report, September 26, 2013)
Healthcare Delivery:
Estimated size: USD 32 Billion
Includes Government and Private Hospitals
Pharma and Biotech:
Estimated size: USD 20 Billion
Includes the manufacture, extraction, processing,
purification and packaging of chemical and biological
materials to be used medication for humans or animals

Overview To Healthcare Market In India
Medical Insurance Services
Estimated size: USD 3.7 Billion
Includes health insurance and covers an individual's
hospitalization expenses and medical reimbursement

Medical Technology
Estimated size: USD 4.4 Billion
Includes companies engaged in manufacturing medical
devices, equipment, electronics and consumables

Medical Device Markets The Growth
set to Accelerate Global v/s India
Indian Medical Device Industry:
Indian Medical Devices Industry
Medical Equipments Segment

The major import of medical equipments include : specialized
body scanners, ultrasound scanners, specialized portable
and non-portable X-ray machines, implantable pacemakers,
radiography and radiotherapy equipment.

The major promising sub-sectors include :

Medical Imaging Equipment
Cardiology Equipment
Laboratory Instruments/Supplies
Cancer Diagnostics & Treatment Equipment

Indian Medical Devices Industry
Medical Disposables Segment

Used by practically all hospitals and private nursing homes in
the country, including diagnostic and pathological laboratories.
In hospitals, disposables are used, both in the ward as well as
the OPD.

Still significant numbr of devices and disposables are being
imported at international prices.

Only few low end products are being manufactured
indigenously, such as fluid administration sets, blood bags, and
products such as condoms and copper T. majority of the low
end devices and disposables are manufactured in the an
organized sectors.
Indian Medical Devices Industry
Market Share Growth
Level 1 Syringes, Scalp Vein Sets,
Needles, Urine Bags
60% 15%
Level 2 Stopcocks, Nebulising
Chambers, IV Cannulas
Extension tubes
15% 37%
Level 3 Blood bags, Endotracheal
tubes, arterial catheters
15% 35%
Level 4 Heart Valves, Dialysers 10% 20%

Indian Medical Devices Industry
Medical disposables : The major products manufactured in

I. V. Sets and Tubes
I. V. Catheters or Canulaes
Disposable Catheters
Disposables Syringes and Needles
Blood Bags
Disposable Hand Gloves
Disposable Non-Woven Fabric Products
SWOT Analysis
Entrepreneurial nature of the people.
Excellent social structure.
Cheap and abundant low and medium skill manpower.
Stable Governments.
Established base of Pharmaceuticals , Biotechnology,
Petrochemical and chemical as well as Pharma and Plastics
Processing Machineries industry in the state.
Huge latent domestic market.
Some of the units of the industry have International Quality
Certifications like CE , ISO 13485 , etc.
SWOT Analysis

Indian industry is emerging as an innovative, low-cost
producer of quality Medical Devices
Some of the units have been successfully exporting
their products for many years.
India has already become the top 5 preferred source
status for syringes, needles, IV catheters, contraceptives,
blades, gloves, intra ocular lens..
Lower cost of living
Positive quality of life.
Complexity and Uncertainty in
Medical Devices
The environment for the medical device industry is complex
and difficult to predict.

Health Insurance norms evolving in reimbursement for

Continuous innovation of products and technologies is a
proven way to generate premium prices for medical
Complexity and Uncertainty in
Medical Devices
Companies need to understand how customers will
perceive a proposed innovative solution and how quickly
they will adopt and integrate it into their routines and

Professionals in the medical device industry need to
develop skills to deal with uncertainty and complexity.

The medical device industry is adapting very fast to its
changing environment.
Challenges Facing Indian Medical
Device Industry
The industry today is facing an entirely new scenario - one in which
regulation is ambiguous but changing, markets are shifting,
healthcare is penetrating in Tier II cities, FDI restrictions are
increasing, customer landscapes and customer demands are
constantly evolving and generating entirely new product/ pricing

Regulatory Mechanism
Manpower And Technology
Investment / Access To Technology
Financial Incentives
Access To Capital / FDI inflows
Absence Of A Comprehensive Reimbursement System
Roadmap For Future Growth
Efficacy &
Research &
& Training
Regulatory Framework And the Pace of Proposed Changes

The amendment proposed to be put before Rajyasabha shortly will be called
Drugs and Cosmetics Act and Medical Devices, 1940 Act.
Medical devices are expected to be defined as per the Global Harmonisation Task
Force ( GHTF ).
The bill that would replace the earlier Drugs and Cosmetic Act is expected to lay
down separate provisions for Medical Devices including a separate definition of
them, their riskbased classification for regulatory control, Clinical Trials on Medical
Devices, Conformity Assessment Procedures, Penal provisions, etc.
This is in stark opposition to the scenario today wherein medical devices are
treated as drugs. The situation is unlike in the US and EU which have separate
pathways for medical devices and pharmaceuticals.
Roadmap For Future Growth
Apart from the notification issued in 2005, in March last year, the Government upon the
recommendation of the DCGI and examination by the Expert Committee, has further
confirmed 11 devices such as Spinal needle, Insulin syringes, three way stop cock as
an accessory of I. V. Cannula / Catheter / Perfusion Set, Introducer sheath, Cochlear
implant, Close wound drainage set, AV fistula needle, Extension line as an accessory
of Infusion set, ANGO kit / PTCA / Cathlab kit, Measure volume set and Flow regulator
as an accessory of Infusion set as drugs.
FICCI recommends a single regulatory authority with sufficient resources allocated to
it for effective implementation and monitoring .
Association Of Indian Medical Device Industry ( AIMED ) also advocates sharing of
regulatory controls given the vast diversity of technologies and varying risk profile of
Medical Devices with a National Regulator for Policy, Licensing & Registration of
Manufacturers / Importers / Exporters for enabling a single window and harmonized

Roadmap For Future Growth
Need For Medical Technology
Innovation in India
Larger number of Implants and other Medical Devices
today are outsourced and imported from other parts of
This makes them costlier and many people are not able to
afford them
Medical technology innovation and development in India
is a crucial issue
Regulatory controls are critical for the development of
Medical Device Industry
Need For Medical Technology
Innovation in India
Innovation In Indian Medical Device Industry

Key enablers supporting Innovation are: Risk Funding, Framework for Public
Private Partnerships, Independent Regulatory Structure as well as special focus
on capacity building in public institutions

Industry Partnership With R & D Institutions

The Medical Device Industry mostly consists of MSMEs and therefore R&D
capability will require partnerships with R&D institutions and laboratories. The
Government should take the lead along with CII, ASSOCHEM, FICCI, etc. to
promote such linkages between R&D institutions located in different parts of the
country. A cluster approach linking Medical Device companies located in
particular region with R&D institutions would be a good way to start. Suitable
fiscal Incentives may be provide to promote investment in R&D.

Need For Medical Technology
Innovation in India
Industry Partnership With R & D Institutions

It is felt that funds for Innovation by small industries should be available.
Govt. should support. Industries also must recognize the importance of
Innovative products development and R&D.

Collaborating With Healthcare Service Providers Resulting In
Affordability For Masses

As per Dr Balaram Bhargava, of All India Institute Of Medical Scinces, it
is essential to have not only partnership, but collaboration and co-
operation is required between Medical Device Companies and
Healthcare providers.
Need For Medical Technology
Innovation in India
Collaborating With Healthcare Service Providers Resulting In
Affordability For Masses

It is a win-win situation for both . Looking to the large domestic market
and the need for the Healthcare provider to be affordable for the masses,
Dr Balram feels that ,the Medical Device Companies can collaborate to
identify the unique unmet needs from healthcare providers and develop
safe, appropriate and affordable solutions. He also feels that the Indian
Industry will become more competitive in Device Development.
Dr. C. P. Sharma, also supports him saying that Healthcare providers
must be involved in new product development by Medical Device
Industry. Dr Sujoy Guha also believes that , Health Care providers are
to be a part of the consortium.
Need For Medical Technology
Innovation in India
Collaborating With Healthcare Service Providers Resulting In Affordability For
Unless this process takes root urgently, India looks down the barrel of a future ridden
wherein technology at a very high cost would be in the form of imported devices only,
putting severe strain on scarce healthcare resources, a situation that our nation cannot
Opportunity For Larger Purchasing Power By Healthcare Providers
Because of such partnerships, The Healthcare providers leverage a larger purchasing
power which can lead to lower procurement costs and these can be passed on to masses to
increase affordability. Because of such cooperations , New enabling technologies can be
tested and validated through Healthcare providers which can help in cost reductions at a
faster pace.
Clinical Research
The Indian clinical and healthcare provider community has thus far not revealed a strong
focus on outcome tracking, clinical research and publication of results. There is however, a
tremendous opportunity for collaborative work between the domestic device industry and
Indian healthcare providers.

Need For Medical Technology
Innovation in India
Standford India Biodesign Programme : Developing Leaders In The Medical Device
As per Dr Balram Bhargava , Industry has to recognize the importance of R&D for their
long-term sustainability and growth. Innovation is key component in R&D. Industry has to
make conscious effort to develop medical device design capabilities. Government has taken
several initiatives to encourage R&D in terms of subsidies, funding opportunities and
capability development.
Dr Balram Bhargava is currently leading Stanford India Biodesign Programme.
Introducing the Programme , he mentioned that , we are exposing fellows in the Medical
Device Design Innovation and best practices from Silicon Valley. We are slowly building
capabilities to acquire this knowledge and implement here to develop leaders in the medical
device industry.
Mr Kishor Khanna believes that , this is one area where the government is supporting not
just medical device industry but all industries to set up their R&D cell. Government is
providing tax incentives by virtue of weighted deduction if the R&D project is approved by
Department of Science and Technology.
Need For Medical Technology
Innovation in India
Industry Academic Institute Linkages And Need For Improvements

The general opinion of the experts related to Industry Institute Linkages is that though it
exists to a limited extent , the present level is not sufficient for a successful healthcare
delivery. The linkage needs to be stepped up to move up the Innovation through the value
chain. The increased interface Between R & D centres, Academia and Industry will lead to
bringing affordable products faster to the markets. SCTIMST , IIT's and other leading
Institutions have a great pool of talent and Industry should develop partnerships with them
to fast track Innovation and improve quality of existing devices.

The Stanford India Biodesign program is , also creating opportunities to bring the
stakeholders (i.e. Industry-Institute) on a common platform, have an open dialogue and
collaborate! Innovate future! as introduced by Dr Balram Bhargava.

Need For Medical Technology
Innovation in India
Innovation Clusters
As per Dr Balram Bhargava, Government has already initiated the Programme on
Innovation Clusters, which aims to promote collaborative R&D, so that our industry will
operate at the frontiers of knowledge. This will largely benefit the small industries, which are
economic growth engines and major source of Invention and Innovations. I think we need to
promote these initiatives on a larger scale so that more and more companies benefit from
the eco-system.

Medical Device Industry Supply Chain In India
A strong supply chain supports the Medical Device Industry to improve Global
Competitiveness. Industry leaders feel that a positive approach will be collaboration with the
industry and academia to develop indigenous manufacturing base of all possible materials
required by the industry. Not only input material but also the availability of high tech
machinery essential for moulding, extrusion and assembly is not at par with other countries.
A synergetic approach is required where the industry, academia and government work
towards developing the technology base in India.

Need For Medical Technology
Innovation in India
The Manufacturing Landscape
The Indian medical devices industry forms a very small part of the total manufacturing
industry accounting for only 0.2% of all certified facilities. The high-tech end of the medical
device market is currently led by multinationals with extensive service networks; whereas
low end equipment and disposables are led by domestic manufacturers because of their
cost effective innovations.
Collaborative trends across these two segments are visible through deals and
acquisitions, setting up of local manufacturing by large international players and other
technical alliances.
Local manufacturing impetus by foreign players over the last few years:
Setting up a manufacturing facility at Pune to produce medical devices, especially equipment to
support haemodialysis treatment process
B Braun Besides its suture manufacturing plant in Chennai, B Braun acquired a controlling stake in Hyderabad-
based medical devices manufacturer Oyster Medisafe

The Company has set up a strong manufacturing base in India for blood bags, seals, component
extractors, storage and transfusion sets and services blood centres across the globe
Need For Medical Technology
Innovation in India
The Manufacturing Landscape

Need For Financial Support For Product Developments, Commercialization
And Productivity Improvements
In western countries almost 30-40% start up companies or newly formed entities are
funded by either Venture Capitalists or Private Equity players. This gives these companies
enabling capital to spend on R &D and step up capital expenditure to bring in products
faster to the market. Similar environment needs to be created in India with help of Financial
institutions. Financial support should be available for companies involved specially in
Product development through One time grants from Universities and Government
Indian manufacturers do not have the capacity or resources to make such huge
investments in R&D on their own.

Need For Medical Technology
Innovation in India
The Manufacturing Landscape
Need For High Quality Components And Raw Materials

Industry feels that in order to promote starters in the Medical Device Industry , the import
duties for raw materials and components be reduced significantly. The Industry is looking
for support in the form of suitable tariff changes to enable access to high quality
components and material.
Innovation in the field of medical devices including orthopaedic implants is driven by the
need to improve clinical outcomes. Ideas generated out of this need require to be carefully
nurtured through the processes of design, prototyping, testing and validation which are
becoming increasingly complex due to increasing international regulatory pressures.
Government should support for high risk research and innovation to deserving and
experienced sections of the domestic industry .Setting up of crucial knowledge based
facilities focused on testing and validation of devices is another critical area where
Government driven actions will go a long way in supporting the emergence of a strong
medical device sector

Need For Medical Technology
Innovation in India
Globally Competitiveness Exports
The Indian Medical Device Industry is severely disadvantaged compared to the Western
World & also other global competitors including China
It is absolutely essential for the Government, both at Centre and State levels, to have a
clear vision to develop Indian manufacturing capabilities in the Medical Device Industry. The
Industry also demand that the Government should declare Healthcare Sector as a Priority
Sector which will drive higher capital investments in Manufacturing.

Export Incentives
In order to be competitive, the Industry badly needs support from the Government. The
Industry needs Higher Duty Draw Back as well as Increase in DEPB rates by at least 2 3
%. Interest subvention scheme should be extended to Medical Devices so that exporters
can get access to lower cost of funds.

Need For Medical Technology
Innovation in India
Medical Device Clusters

The concept of creating and supporting Medical Device Industry Clusters in India is still at
very nascent stage. The Industry strongly feels that Both Government as well as Industry
should give priority to this activity.

The Industry believes that, Creating of Special Medical device Technology parks and
Clusters will fuel growth of Medical Device Industry. If land is available at concessional rates
(some states in India are already giving special low rates for Land of Bio-tech Industries)
and vocational Training institutes are developed around these clusters, then there will be
easy availability of skilled Manpower which will facilitate the faster development Medical
device Industry in India. Some states like Gujarat, Tamil Nadu and Rajasthan are already
working in this direction. The State Governments definitely need to push the creation of
these clusters at a faster pace.

Need For Medical Technology
Innovation in India
Medical Device Clusters

Creating and supporting Medical Device Clusters will go a long way towards giving a
boost the sector in India. The availability of common sterilization facilities, tooling and
engineering workshops, testing facilities, etc. will help reduce the overhead burden on
MSMEs. Government organizations like CII, ASSOCHEM, FICCI should support and
promote such clusters.

Virtual Clusters
Virtual Cluster As Opposed To The Physical Cluster
Virtual Clusters are not restricted by geography , It is defined as a Cluster Of
Knowledge, Knowhow, Skills And Capabilities. Industry feels that Government should
identify existing skills and capabilities in varied areas present in various parts of the country,
either at academic institutions or Government supported laboratories. It should then tie up
these capabilities together based on some shared common objectives.
Other Critical Challenges:
Skill Development
Building a trained workforce
Biomedical engineering training and certification programmes

Getting the correct pricing strategy
Appropriate reimbursement mechanism
Using refurbished equipment in a regulated and safe manner

Warehousing Requirements
Higher Volume products should be centralized so that they can be easily distributed to
various parts of the country.
Warehouses with proper storage facilities should be created in each District for storage
of products to ensure efficient distribution to smaller healthcare centres. This will ensure
shorter delivery times. Public Private Partnerships will definitely make this more
Roadmap For Future Growth
Reimbursement Mechanisms

The role of the government has to shift from provider to payer. Latest Five Year
Plan (2012-17) proposes an ambitious expansion programme of healthcare related
services including doubling the level of public health spending to 2.5 % of GDP and
increasing health insurance coverage from 25 % to 75 %
GOl and other stakeholders should aim to reduce out-of-pocket payment up to
40% in the coming years
Government can consider group coverage to make provision for private sector
group employees
Reduction of insurance premiums

Roadmap For Future Growth
Medical technology providers and healthcare providers need to work, with patient
outcomes and cost-effective care in mind.

The government has to play the role of a key enabler, taking care of:
-product approval framework
-safety guidelines
-FDI policy
-reimbursement mechanisms
-med-tech clusters for indigenous manufacturing
-R&D benefits
-up-skilling the workforce

This would provide a strong platform for med-tech and healthcare operators to
collaborate on and innovate, delivering what payers need and deserve

Roadmap For Future Growth