Research paper 3

KIJSET/JUL-SEP2016/VOL-3/Iss-3/A2 ISSN:2348-5477
IMPACT FACTOR(2016) – 6.1701
Copyright © 2016 Published by kaav publications. All rights reserved www.kaavpublications.org
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KAAV INTERNATIONAL JOURNAL OF SCIENCE, ENGINEERING
& TECHNOLOGY
A REVIEW PAPER TO STUDY VARIOUS FACTORS EFFECTING THE
DEVELOPMENT OF INDIAN MEDICAL DEVICES INDUSTRY
RESEARCH SCHOLAR
VIPIN DEWAN
ABSTRACT:
The Medical Devices and Equipment industry, valued at US$ 2.5 billion contributes only 6% of
India’s US$ 40 billion healthcare sector. Moreover, it is growing at a faster annual rate of 15% than
10-12% growth seen in the Healthcare sector in its entirety. India is importing nearly 75% of medical
devices to cater to its healthcare needs (BMC health services 2013). However these imported devices
are not affordable to all the needy patients. The current manufacturing of devices in the country are
limited and also not recognized as per the international standards. Another area for the Indian
manufacturers is the R&D in the new product developments, cost effectiveness and USFDA
certification for exports. Few international companies from Europe and USA have started either
direct manufacturing or acquisition of Indian facilities. Some examples include 3 M's manufacturing
plant in Pune, Becton Dickinson's manufacturing facility in Haryana, Hollister's setting up
manufacturing facility in India and Philips Medical Systems' acquisition of Meditronics and Alpha X-
Ray Technologies, Smith & Nephew’s acquisition of Adler Sushurt Surgical in Pune.
1 Introduction
The Medical Devices and Equipment industry,
valued at US$ 2.5 billion contributes only 6% of
India’s US$ 40 billion healthcare sector.
Moreover, it is growing at a faster annual rate of
15% than 10-12% growth seen in the Healthcare
sector in its entirety. A rise in the number of
hospitals and the increased requirement for
healthcare facilities creates a need for
sophisticated devices and equipment, which can
provide accurate treatment to individuals. The
Medical Electronics segment of this industry
incorporates control, conversion, sensing,
processing, storage, display, and transfer of
information on anatomy and physiology by
making use of the Electronics and Communication
Technologies. The Medical Equipment industry is
quite wide with > 14,000 different products types,
as per the Global Medical Device Nomenclature
(GMDN). The products range from wound closure
pads to stents and IVD machines of medical
devices. As per Mr. BalramSankaran, who
presented scenario of Indian medical devices
manufacturers, there are lot of gaps in streamlining
the industry. The following points were
highlighted in his presentation to 2nd
Global Forum
on Medical Devices, WHO, Geneva in year 2013
Medical devices industry is ignored in India by

7
policy makers. No ‘mentoring’ administrative
ministry or Department .Its very easy to import
than to get manufactured in India
The regulation on medical devices is not uniform
and covers on certain essential devices.The import
Duty on raw material to manufacturer medical
devices is more compared to importing the
products, this also makes it unviable to
manufacture the products locally.However, in the
latest budget, there will be duty on medical
devices, but will this ensure reduction in imports
and encourage in local manufacturing as per Prime
Minister’s campaign of ‘Make in India’, will still
remain a question for some time..Recently India
started the initiative to bring medical devices
under DPCO, but there is still a long way to go to
cover all the devices under it. The price regulation
will ensure reduction in imports and might
encourage big industry giants to enter into medical
devices manufacturing.
2 Problem Statement:
India is importing nearly 75% of medical devices
to cater to its healthcare needs (BMC health
services 2013). However these imported devices
are not affordable to all the needy patients. The
current manufacturing of devices in the country
are limited and also not recognized as per the
international standards. Another area for the Indian
manufacturers is the R&D in the new product
developments, cost effectiveness and USFDA
certification for exports.The government is
expected to develop a regulatory structure leading
to quality products being developed by the
manufacturers. However, the current regulatory
structure lacks active participation from the
government but with the increase in competition in
the sector, this is just a matter of time. The last few
years have seen an increase in domestic
manufacturing of medical equipment. With
impetus from Government of India schemes, India
is beginning to look forward to being recognized
as a manufacturing destination for sophisticated
medical technology. The regulation of medical
devices is often complicated by legal
technicalities. In India, the Department of Health
has nominal jurisdiction over medical devices,
evident from the illegal reprocessing and re-
packaging of used syringes for re-sale and the
availability of equipment that fails minimum
safety and quality standards. Few international
companies from Europe and USA have started
either direct manufacturing or acquisition of
Indian facilities. Some examples include 3 M's
manufacturing plant in Pune, Becton Dickinson's
manufacturing facility in Haryana, Hollister's
setting up manufacturing facility in India and
Philips Medical Systems' acquisition of
Meditronics and Alpha X-Ray Technologies,
Smith & Nephew’s acquisition of Adler Sushurt
Surgical in Pune.Further to the current
developments in medical devices industry, it is
important to evaluate the R&D facilities,
manufacturing practices, Govt. support and
regulation, foreign equity, M&A and local
manufacturers’ competencies to produce world
class products to meet the current need of Indian
healthcare as well export to the developed
countries. There are hundreds of small medical
equipment companies in India in different
segments of the market. This is because the entry
barriers to the industry are very high because of
the technology. The margins in the industry are
high and the sales forces make a big difference as
doctors have to be targeted to educate them.As per
collaborative study conducted by ISID – PHFI
(working paper series 2) in March, 2013, it is
mentioned that developing countries like India
have much to gain from effective use of advanced
medical technology but on the other hand
inefficient and unregulated use of expensive
medical devices may also cause medical
expenditure inflation in the country.Effective
regulation of medical devices industry is important

8
at a juncture when India is planning to embark
upon Universal Health Coverage mechanism
regulation of imports, production and use of
medical technologies would be one of the most
challenging tasks before the government. In the
context of India, on one hand with the increase in
private providers of health services, use of high
tech medical devices increasing; on the other hand
most of domestic manufacturers produce at the
low tech and disposable and supplies end of the
market.This research paper defines manufacturing
of medical devices industry as the sum of class
2660 (Manufacture of irradiation, electro medical
and electro therapeutic equipment), 3250
(Manufacture of medical and dental instruments
and supplies) excluding subclass 32507
(Manufacture of ophthalmic goods, eyeglasses,
sunglasses, lenses ground to prescription, contact
lenses, safety goggles etc.) and subclass 30922
(i.e. Manufacture of invalid carriages with or
without motor).Section‐V of the research paper
mentioned aboutStructure and Patterns of
Production and Trade of Medical Devices in India
3. Literature Review:
There have been few studies conducted on the
Indian medical devices manufacturers. However,
with Govt. of India campaign of ‘Make in India’,
the medical devices industry also brought a
revolution. The Medical Devices and Equipment
industry, valued at US$ 2.5 billion contributes
only 6% of India’s US$ 40 billion healthcare
sector. Moreover, significant efforts have been
made in the medical technology ecosystem to
stimulate innovation in this space so that the
opportunities provided in the Indian market can be
capitalized by the companies working in this
domain and the Indian consumer of healthcare
services stands to benefit.In the past, the sector has
significantly brought down the incidence of
disease among patients, families, society as well as
improved the country’s health system,
significantly. However, in India the penetration of
medical devices is low and inadequate due to the
barriers that prevent their usage.The government is
expected to develop a regulatory structure leading
to quality products being developed by
manufacturers. The last few years have seen an
increase in domestic manufacturing of medical
equipment.International companies in this field are
also using India as a manufacturing base by either
setting up facilities of their own or by acquiring
domestic manufacturers.
Drivers for Growth of Medical Technology
Sector in India
 Economic growth leading to higher
disposable incomes
 Increased Public Spending in
Healthcar
 Increased Private Investment in
Healthcare
 Increased Penetration of Health
Insurance
 Emergence of new models of
healthcare delivery
 Public Private Partnership (PPP) route
to Innovation .
The Indian medical technology
industry is expected to grow from US$
2.75 billion in 2008 to US$14 billion
in 2020. While strong drivers for this
growth exist in India, there is also a
need for innovation in the medical
technology market given the ground
realities. Many Indian and overseas
medical technology companies are
launching innovative products for the
Indian market
4. Research Gap: Although there are many
research papers those have covered Govt. barriers,
environmental conditions affecting the Indian
manufacturing in medical devices. However there
is still a research gap in exploring the following:

9
 Manufacturing and marketing practices in
Indian Medical devices
 Perception of Indian and foreign
(Developed Countries) users of the Indian
manufactured medical devices
 New regulation required from Govt. of
India to ensure quality products and
promotion in other countries
5. Aim and Objective of the Study:
The aim and objective of the study is to understand
the various factors effecting for the development
of Indian Medical Devices Industry and actions
required for the development of the industry to
meet local demand as well export.
The study will primarily focus on the following
points:
 What are the limiting factors for Indian
Medical Devices manufacturing to meet
local demand and exports to the developed
countries?
 What are the current processes, methods
and systems the industry follows and what
additional processes can be added to be
international suppliers?
 Comparison of Indian and Imported
manufacturing process (sample of one or
two organizations)?
 What are the factors in regulatory system
those are effecting and limiting the Indian
Medical Devices Industry?
 Can local companies compete with global
manufacturers in quality, R&D,
innovation and need?
6. Hypothesis: The following research hypotheses
are to be proposed in order to identify what are the
various barriers and enablers for manufacturing
Medical devices in India
a) Null Hypothesis: Indian manufacturers
don’t know the western world’s
perception of India made medical
devices
Alternate Hypothesis: Indian
manufacturers know the western world’s
perception of India made medical
devices
b) Null Hypothesis: Indian manufacturers
don’t want to invest on technology,
GMP, quality and HR
Alternate Hypothesis: Indian
manufacturers want to invest on
technology, GMP, quality and HR
c) Null Hypothesis: Govt. of India doesn’t
want to liberal policies and processes,
suitable for Indian manufacturers of
medical devices
Alternate Hypothesis: Govt. of India
want to liberal policies and processes,
suitable for Indian manufacturers of
medical devices
d) Null Hypothesis: The production
capacity doesn’t meet local requirement
of domestic market, hence cant export to
other world
Alternate Hypothesis: :The production
capacity meet local requirement of
domestic market, hence want to export
to other world
7. Research Methodology:
This section discusses in detail about the
research design, sampling design, research
strategy, research paradigm, data types and
data collection that are involved in this
research.

10
Research paradigm:
Research paradigm is a method which is used
by the researcher in order to carry out the
study or research work. Blaikie (2007)
mentioned that, any scientific research that
can be conducted only by using any one of
these two research perspectives:
i. Positivism and
ii. Interpretivism.
This research makes use of both positivism
and Interpretivism. Thomas (2010) stated
that, positivism is known as the quantitative
research and it absorbs the fact and put it into
measurements in order to reveal the results.
Interpretivism means interpreting.
Interpretivism is also known as hermeneutics
and qualitative research.
Research Approach:
We will use both kinds of quantitative as well
qualitative research approaches. Quantitative
research is based on the quantitative
measurement of various parameters of
manufacturing processes, quality standards,
Govt. regulation etc.. On the other hand
qualitative research is related to the
phenomenon of quality or kind, with this type
of research we will try to discover motives
and desires by using interviews with the
sample audience. The other techniques are
word association tests, sentence completion
tests, story completion tests etc.
8. Limitation of the research:
a) The study is limited to only 6 companies
and may not present the complete
scenario of Indian Medical Devices
Industry. It will also involve limited
number of respondents.
b) Due to lack of information from Govt. of
India on policy making, the findings may
not give full picture of the Govt. plan to
support “Make in India”
c) Currently Govt. of India is under policy
formation, hence it will be difficult to
predict the barriers as complete solution
for manufacturing medical devices in
India by Indian companies
d) Access to foreign companies is limited and
may not provide broader aspect of their
perception about India made medical
devices
9. Conclusion:
Indian medical devices companies can
develop new products suited to local needs
and follow the international standards for
manufacturing world class products for
export also. The Govt regulation should
encourage the local manufacturing of all
medical devices in order to bring down the
cost as well create other opportunities like
employment, FOREX generation by exports
and reduce dependence on foreign
manufacturers
10. References:
1. FICCI Report (2010) Assessment of
Factors Determining Medical Devices in
India. p.2. 16-28
2. BALRAM, S. (2013) Challenges in Local
production of medical devices by Domesitc
Manufacturers in India
3. EPSICOM (2013) Medical Devices Sector
– Challenges and methodologies. Available
from:
www.espicom.com/india-medical-device-
market
4. Wasserman, E. ( 2014) Govt. examined
recommendations of standing committee on
amendments Bill,

11
5. Pritam, D. Indranil, M. &Sakthivel S.
(2013) Working Paper Series 02,
MEDICAL DEVICES
MANUFACTURING INDUSTRY IN
INDIA
6. FIERCE MEDICAL DEVICES. (2014)
India moves closer to approving key
medical device legislation (Online)
7. Rajdutt, S. &Shekhar, S. (2012) A brief
overview of regulatory framework for medical
devices in India
8. Ritu, K. (2013), Regulation of Medical
Devices in India
9. SZYMON,J. & GAYATRI,S. Case Studies of
Innovative Medical Device Companies from
India: Barriers and Enablers to Development
(online) available from
10. KPMG (2011) KPMG Report. Amit Mookim
(2011), p19-21
11. Aklanta, K. (2012) APCO, Corporate
Advisory and Govt. Affairs,
12. BHARAT BOOK (2013) Extensive research
on Indian Medical Devices. (online) available
from:
http://www.bharatbook.com/medical-devices-
market-research-reports/indian-medical-
device-market-outlook-to-2017
13. KPMG (2012) AmChem Report
14. Nishita, D. (2013), Investment in Healthcare
in India
15. Govt. of India (2006) The Medical Devices
Regulation Act, 2006
16. Dinar, Kale (2010), Pharmaceuticals in
developing and Emerging Economies:
Production, Innovation and access to
Medicines
17. Govt. of India (2013) The Drug & Cosmetics
(Amendment) Bill 2013

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