Developed and Emerging Medtech Markets Benefit from Innovation Made in India

The MD&M India conference provides medical device OEMs with unprecedented access to key leaders in the medical technology community as well as a unique opportunity to gain new insights into the dynamics of this remarkable industry. Leading up to the event, which will be held in Mumbai from 23 to 25 May 2012, medtechinsider India will publish a series of articles and interviews with the aim of contextualising some of the issues that will be explored at the conference. We are delighted to start this series in the company of Ajay Pitre, Managing Director at the Sushrut-Adler Group, which manufactures and distributes orthopaedic products.

In addition to his day job, Pitre is Chairman of the Confederation of Indian Industries, Medical Equipment Div., and is part of a core committee advising Indian regulators on medical device regulations and implementation strategies. He belongs to various professional organisations and government agencies and strives to promote “understanding and change in the medtech space.”

On the first day of the MD&M India conference, Pitre will lead a panel discussion on the evolution of healthcare technology in India and its prospects for economic growth in the years ahead. He graciously offered medtechinsider India a preview of the themes that will be touched on by the panel.

medtechinsider: Please share your perspective on the importance of medical technology innovation in India.

Ajay Pitre: Innovation in the field of medical devices, including orthopaedic implants, is driven by the need to improve clinical outcomes. Ideas generated from this need require careful nurturing through the processes of design, prototyping, testing and validation, all of which is becoming increasingly complex because of regulatory needs. However, innovation in devices also takes another form—small changes to existing technologies that result in devices that are safer or easier to use. With an ageing population, innovation in the orthopaedic field today focuses on improving the longevity of implants used for joint replacement. Innovation also focuses on the challenges raised by the increased incidence of osteoporosis. This condition weakens bones by reducing bone density, which reduces the ability of orthopaedic implants to anchor themselves to skeletal structures. Implants that overcome this deficiency will enable superior treatment modalities.

medtechinsider: How would you characterise the medical device industry in India? Where is it headed?

Pitre: The use of medical devices has significantly increased over the last few years in India. There is increasing acceptance of devices amongst the medical community and patients, who want faster recovery times and maintenance of a good quality of function and thereby life. Although awareness of new technologies is growing amongst patients as well as healthcare providers, much still needs to be done. This gap (latent demand) has stoked the interest of Western-based multinational device companies in the Indian market. Many of these companies have experienced saturation in their traditional markets in Europe and the United States and see emerging high-growth opportunities in the Indian market. As a result, marketing-driven investment is flowing into India from these companies. While these companies are currently focusing on entering the market with aggressive pricing policies, all stakeholders, including India’s policymakers, should be mindful of the fact that the absence of a strong, vibrant and cost-effective domestic industry could lead to an upward spiral of healthcare costs similar to what has happened in developed economies.

medtechinsider: Given what you have just told us, I can only assume that the  medical equipment market in India is healthy?

Pitre: Indeed! CAGR is in the double digits across the various segments of the medical device and equipment sectors. Considering the rather low absolute capacity of healthcare services in our country (compared with accepted global matrices) combined with a large urban/rural skew in the availability of capacity, substantial investments are needed in India. This is being recognized both by the private sector as well as the government. These increased capacities will also undoubtedly lead to addressing latent demands that are not being met today. This in turn will increase growth rates.

medtechinsider: What major challenges is India’s medical device manufacturing sector facing today?

Pitre: The challenges faced by the Indian medical device industry vary depending on the sector and the progress that it has made. Progressive companies face the challenges of innovation and high cost associated with R&D, testing, validation and regulatory approvals, especially in an environment of relatively low price realisations. The vast majority of small-scale device companies that have focused on providing cheap solutions without paying adequate attention to quality face a different set of challenges. These include the cost of upgrading technology and operations as well as the bigger challenge of developing an internal knowledge base that supports improvement. Importantly, segments of the domestic industry that have been insulated from regulatory and patient safety requirements will have to learn to cope with various new requirements involving extensive manufacturing and quality related documentation, preclinical product validation, vigilance, adverse event reporting, postmarket surveillance and other patient safety requirements.

On a positive note, it is a matter of pride that individual islands of excellence exist in the domestic medical device industry. Companies in each product category, from orthopaedics and cardiac implants to medical disposables, have strived to achieve global benchmarks in spite of the absence of regulation, which has been introduced relatively recently. These companies make products that carry the CE marking and have achieved ISO 13485 certification, even before the Indian regulations were notified. These efforts are particularly laudable considering that mandatory regulatory requirements and even user demand were nonexistent. Moreover, they ran the risk of unfavourable cost comparisons with devices that did not have to meet such onerous regulatory standards. At Sushrut-Adler, we embarked on our journey of implementing a quality management system back in 1996 and actually sought and got certified in 1999 for the first time. We were the first to do so in India in our sector. India’s regulations for implantable devices were introduced in 2005.

While the introduction of regulation into the industry may be turbulent for some, it will also lead to positive changes that bode well for the industry; namely, a future in which Indian medical device companies bring to the world innovation, new techniques and technologies and the famed Indian cost-effectiveness.

On another note, it is critical that the government act swiftly to remove tariff anomalies that disadvantage the medical device industry in India as a whole. One example is the inappropriate taxation of imported inputs, mainly critical raw materials not manufactured in India that are required by domestic device makers. The import duties on these critical inputs can be comparatively higher than on imported finished products, some of which are even exempt. Government support for high-risk research and innovation and for crucial knowledge-based facilities focused on the testing and validation of devices is lacking, and these gaps must be filled for the domestic industry to make progress. On a positive note, there is now recognition of these needs amongst policymakers and some initial steps have already been taken in this direction.

medtechinsider: What is your company’s focus area and what do you see as the way forward?

Pitre: It is a generally accepted fact of life in the world of medical devices today that innovation and new solutions emerge from the developed Western world. However, it is also a fact that a high-cost development model has evolved in the West that raises sustainability issues. Furthermore, less than 15% of the world’s population is concentrated in developed Western or affluent economies, while nearly 85% of the world’s population resides in developing/less affluent economies. In this scenario, the situation is ripe for innovative device companies from countries such as India to develop solutions that are more appropriate to 85% of the world’s population, both from the point of view of clinical needs, which may be different, and from a cost effectiveness standpoint, a criteria that innovation made in the West has always found hard to meet.

At Sushrut-Adler, we see this unique combination of circumstances as a significant opportunity to bring innovation, new techniques and technologies to market that respect the fundamental principles of medical device safety, effectiveness and affordability. We believe that this will help to meet the growing needs of the less-affluent world, which represents more than 80% of the global population, as well as help to contain the cost of healthcare in the affluent countries of the world. I truly believe that we can envisage collaborative strategies that would benefit everyone.