Medical Devices Industry in India on a Roll
August 13, 2013: Thanks to the growing healthcare sector in the country, the medical supply industry is on a roll. Demand for bandages, blood collection sets, catheters, intravenous cannulas, needles, scalpels, syringes, surgical blades have been rising steadily in recent times. The medical supplies market including medical devices is expected to touch US$ 2.2 billion in 2012.
Healthcare expansion in the public and private sectors, drive for patient centric care, national disease control programmes, life science research projects are key drivers behind the growth in the demand for medical supplies in India. With increasing insurance coverage, patients are seeking high cost medical procedures at private hospitals which are known for immediate quality care. Rise in the number of such hospitals have led to the rise in demand for high end medical supplies.
Budgetary allocations to new government health programmes have been rising as well. The Government of Rajasthan’s move to provide free medication to all has seen an unprecedented rise in demand for medicines, syringes, needles and a whole range of disposable medical supplies. International guidelines have also played an important role in the development of the medical supplies sector. India follows recommendations of World Health Organisation (WHO), United Nations Children’s Fund (UNICEF), United Nations Population Fund (UNFPA) and the Red Cross. Policy changes in response to international guidelines have created opportunities for suppliers. The Union Ministry of Health’s mandate to the public health system to use auto-disable (AD) disposable syringes for immunisation in response to an UN instruction has led to an increase in the production of AD syringes.
The sector is characterised by domestic manufacturers dominating the market for low value medical supplies while multinational corporations controlling the high end medical equipment segment. MNCs hold the major chunk of the market and are playing an important role in spreading the awareness about using better medical supplies. Becton Dickinson India has created a team of clinical specialists who work with health care providers in improving clinical practices, delivering superior patient value and strengthening health systems. Johnson & Johnson holds 55 per cent of the sutures (surgical stitches) market.
The domestic players are quickly catching up with many of them increasingly showing scale and profitability in recent times. Analysts point out that the mantra to make it big in the sector lies in adapting global solutions to the domestic market in a cost effective manner. The sector provides huge investment opportunities for strategic, private equity, domestic and overseas investors as well. Research and Development (R&D) is also an important factor. Companies with established R&D facilities are increasing their line of products which are in turn translating to higher sales. Terumo Penpol, a joint venture between Penpol India and Terumo Corporation, a Japanese company conducts in-house research to develop customised products to meet specific requirements of more than 150 countries. 3M India has made an investment to the tune of US$ 20 million in a state of the art R&D facility with an aim to create world class innovative products and solutions tailor made for Indian customers.
The country is fast emerging as a base for medical supply exports. Cheaper production costs and adoption of global quality control are the key factors. Romsons, HMD, Sutures India, Terumo Penpol are exporting a large portion of their production. HMD, Asia’s largest syringe maker enjoys more than 60 per cent of the single use syringe market in India and exports one fifth of its total sales. Sutures India has a manufacturing capacity of 20 million sterile sutures a year and exports to 50 countries in Europe, South America, Africa and Asia. The medical supplies industry is booming thanks to the factors mentioned above and is only going to scale new heights in the future.