Indian Medical Device Startup

The Indian medical device industry is fragmented, price sensitive and hamstrung by infrastructure constraints such as erratic power supply, low doctor-patient ratio and a shortage of trained personnel to handle complex processes. These are pain points that Indian startups are trying to overcome to gain market acceptance, said Vishnu Bhat, managing director of BlueNeem Medical Devices.

However, Indian companies are developing products for domestic markets. When combined with better quality of service and after-sales support, it is seen as going a long way in positioning Indian startups against competition from multinational companies, he added.

The government has created a favorable ecosystem through ‘Make in India’ and the Medical Device Rules 2017 which came into effect on 1st January 2018. While the former gives a boost to produce quality products cost-effectively , the second prevents the import. dependency, Bhat told Pharmabiz in an email.

With Indian companies efficiently being in the service sector, accessing niche product development talent for specialized medical device manufacturing has been a challenge. Many product development skills and hardware talent moved to the service sector for better pay. In addition to the shortage of product designers, India poses several challenges for the design and manufacturing of medical technology, he noted.

Currently, although the Indian medical device industry is on a growth trajectory and is considered an emerging sector, venture capitalists and private equity firms do not see much commercial potential in these companies. The sector is largely ignored, with shorter investment cycles for PE or VC companies looking to get out quickly for a quick ROI (return on investment) and the fact that Indian companies do not offer a portfolio of products varied to scale and the segment is being highly capital intensive with long gestation periods. The large R&D budgets of international companies are a major impediment for small national players to succeed. Additionally, VCs and PEs traditionally invest in midsize companies on the growth trajectory and have been reluctant to invest in early-stage medical device companies. However, the outlook is quite positive as Indian companies are aggressively seeking innovation and we expect significant investment in the future, Bhat said.

The import dependent medical device sector is expected to stimulate manufacturing through the 3 medical device parks in Andhra Pradesh, Maharashtra and Gujarat. In addition, local consumption coupled with a strong demand for exports will boost domestic demand.

Considering the reliance on imports and existing manufacturing capabilities, it is in vitro diagnostic imaging, orthopedic prosthetics and consumables that indicate promising growth prospects. Citing a recent report, he said that India’s medical device industry is growing at 15%, which is more than double the global growth rate of 4-6%, and is expected to become a $25-dollar industry. 30 billion in India by 2025. Currently, imports account for more than 75% of the estimated US$5.2 billion medtech sector.

The new regulations on medical devices increase the credibility of Indian companies on a global platform. The industry will take center stage as start-ups and small and medium-sized companies commercialize specialized surgical devices such as stents, catheters and high-end devices used in interventional radiology, Bhat said, adding that even Blue Neem is heading towards the disruptive innovation from incremental innovation.