A cure for import-driven $5 bn medtech industry
The Indian medical devices market has traditionally been import- driven, despite the availability of inexpensive labour and local manufacturing advantages.
When Vishnu Bhat was working at Infosys in the 1990s and listening to the likes of N R Narayana Murthy talk about building the future of the nation and what every individual could mean for it, Bhat came to the conclusion that if he had to make a contribution, it had to be in the sunrise medical devices sector.
It was an under-invested, under-focussed and underleveraged industry that never witnessed a boom like its sister, the pharmaceuticals industry.
Hence, Blue Neem came into being in 2009 with the idea of curing the importladen medical devices industry through local manufacturing like neem, which has healing properties and is native to India. It was founded by Bhat, who incubated the cloud and big data businesses at Infosys, and Pankaj Hans, Rajendra, Satish B, and Vittal Rao, all experts in the medical devices manufacturing space with over 20 years of experience.
“If you have import dependence, there is nothing much you can do on managing the cost of health care, you can only pump in taxpayers’ money in the form of subsidy,” said Bhat, founder of Blue Neem. The huge mark-up cost at the distribution level make imported products 10 times as expensive as locally manufactured ones.
With the motive of making India a manufacturing hub for medical devices, the 400-plus Blue Neem team is bringing innovation with riskbased management in the domestic market.
According to KPMG, if today’s medical device manufacturers fail to stake their claim in the evolving value chain, they will risk being caught in the middle and becoming commoditised. Staying ahead should mean offering value beyond the device and solving healthcare’s problems — rather than contributing to them.
In India, there are over 100 medical devices companies, but these are mostly commodity-driven, with lack of specialty players.
Blue Neem is trying to disrupt the ecosystem with its innovations that are exclusively made to suit the Indian anatomy. It has recently launched a urethral stent, which reduces discomfort as it moves away from the sensitive area, unlike the stents available in the market. Called the Triple J, it is an improvement over the Double J stents that cause discomfort. The company is also working with the Karnataka–Israel Program for Industrial R&D to develop a device to reduce urinary incontinence among women. It’s a novel device, set to go to trials soon.
Apart from urology, its team of about 10 innovators is working towards developing niche devices in nephrology, gastroenterology, and radiology segments, including products such as catheters, needles, blood tubing sets, haemodialysis, drainage, and dilation instruments.
The over $96-billion health care industry lacks significant players in the medical devices segment, due to the lack of a government framework. Until now, only 15 devices were regulated, that too under the Drugs and Cosmetics Act. The quality of produce was self-regulated and there were a lot of grey areas. Due to the history of an unregulated set-up, acceptance of locally made products remains weak.
But Bhat says a promising future is in sight with the government preparing to unveil a draft Medical Device Regulation Bill for comprehensive regulation of the sector. It will consolidate laws related to medical devices and establish the Medical Device Regulatory Authority of India for maintaining a national system of controls relating to the quality, safety, efficacy and availability of medical devices that are used in India.
Bhat feels that with the new laws being laid, the sector will have the potential to draw funding like start-ups. “Once we have a strong local manufacturing set-up and are able to raise the standard in the country, these will provide an impetus to reduce the overall health care cost,” said the founder of the Bengaluru-based company.
The company exports its products to over 70 countries and expects to be a big part of India’s medical devices innovation story, a sector expected to swell over 10 times from the current $5 billion by 2025.