By Rajneesh De, APAC News Network
Medical device includes any instrument, apparatus, implement, machine, appliance, implant, reagent for in vitro use, software, material, or another similar or related article, intended by the manufacturer to be used, alone or in combination for a medical purpose. Medical devices are used to diagnose, prevent, mitigate, treat, or cure disease or other conditions, and, unlike a pharmaceutical or biologic, achieves its purpose by physical, structural, or mechanical action but not through chemical or metabolic action within or on the body.
Dissecting the Genesis of Medical Devices Sector
India ranks fourth in Asia and among the top twenty markets worldwide in terms of market size, behind South Korea, China, and Japan. With a focus on R&D and 100% FDI for medical devices to expand the market, the Government of India (GOI) has launched a number of efforts to enhance the medical devices sector. According to value and technology for medical devices, India is anticipated to rank among the top 5 worldwide manufacturing hubs. India is also expected to become a world leader in key areas such as molecular imaging, PCR, ultrasonic scans, medical imaging, and cancer diagnostics.
The Department of Pharmaceuticals has been instructed by NITI Aayog to increase local manufacturing capacity by investigating venture capital and private equity. When international supply chains were hampered during the pandemic, the government’s attention was drawn to medical devices, which led to the Atmanirbhar Bharat initiative and domestic production of medical devices.
Incidentally Pharmaceuticals & Medical Devices Bureau of India (PMBI) is the implementing agency of the Pradhan Mantri Bhartiya Janaushadi Pariyojna (PMBJP). A Department of Medical Devices and a Ministry of Life Sciences/Healthcare Products have been requested in a letter from the Association of Indian Medical Device Industry (AiMeD) to the Prime Minister. In a letter to the PM, AiMeD emphasised the urgent need for a separate department for medical devices.
They asked the PM to rename the Department of Pharmaceuticals (DoP) as the Department of Pharmaceuticals & Medical Devices or to create a separate Department of Medical Devices so that manufacturers will know the government is serious about this industry even though medical devices and pharmaceuticals are not the same thing even though they may both be considered medical products.
The current moniker reflects the emphasis on the developed pharmaceutical industry and the underappreciated, 80% import-dependent medical device industry. Medical equipment production in the nation has gotten a much-needed boost thanks to programmes like Make in India and Atmanirbhar Bharat Abhiyaan. The Government of India has approved the following programs to further boost home production and create related infrastructure:
- Production Linked Incentive (PLI) Scheme to Encourage Domestic Medical Device Manufacturing
- Parks for medical technology are promoted
Major Medical Devices Players and Their Significant Indian Innovations
The major players in the Indian medical device market include:
- Johnson & Johnson
- Novartis AG
- Abbott Laboratories
- Medtronic PLC
- Baxter International
- Danaher Corporation
- General Electric
- 3M Company
- Siemens Healthineers
- Stryker Corporation
To revolutionize cardiac care in India, GE Healthcare came out with its “Made in India,” “AI-powered” Cath lab, the Optima IGS 320. The Cath lab was constructed inside Wipro GE Healthcare’s new plant, which was established as part of the PLI (production linked incentive) program in Bengaluru.
The neural network-based interventional image chain is called AutoRight. With the use of Artificial Intelligence found in AutoRight, image and dose parameters are automatically optimised in real time, allowing physicians to concentrate their attention and experience on patients.
SenSight directional lead system for Deep Brain Stimulation (DBS) therapy has been introduced by India Medtronic Private Limited. Only this directional lead device, which may help to improve stimulation precision, was intended for sensing. Every part of the SenSight system has been developed by Medtronic engineers in conjunction with doctors to address customer and patient demands while integrating smoothly with the company’s line of neurostimulators, including the recently authorized Percept PC neurostimulator.
The blood pressure monitor gadget made by the healthtech business Cognota Healthcare, the “COGNOHEALTH Blood Pressure Monitor,” has been approved by the US Food and Drug Administration (US FDA). Experts from Cognota’s R&D team created and developed the cutting-edge technology that powers the “COGNOHEALTH Blood Pressure Monitor” device. With approval from the US FDA, one of the world’s top healthcare regulatory agencies, Cognota is now able to increase the number of healthtech solutions it offers, such as Remote Patient Monitoring (RPM), Teleconsultation Platform, and Smart ICU, among others.
The GI Genius intelligent endoscopy module, a cutting-edge computer-aided polyps detection system powered by artificial intelligence (AI), was released by India Medtronic Private Limited, a fully owned subsidiary of Medtronic plc. The module, according to the manufacturer, “empowers physicians to diagnose and treat colorectal cancer by giving increased visualization during colonoscopy. It is a disruptive solution that draws on deep learning algorithms and real-time data.” The AIG hospital in Hyderabad is the first medical facility in India to use GI Genius’ advanced screening feature. The GI Genius module employs cutting-edge AI software to visually mark worrisome polyps in real-time that are different sizes, forms, and morphologies.
The market leader in medical radar monitoring and imaging technology (ReDS), Sensible Medical Innovations, and Terumo India, the Indian division of Terumo Corporation, a global leader in medical technology, have partnered to give Terumo India exclusive distribution rights for ReDS Pro and knowledge-sharing of ReDS technology in India.
Patients’ absolute lung fluid volume, which is highly correlated with their symptoms of coronary heart failure, is measured using ReDS Pro (CHF). It is a quick, non-invasive procedure that measures in about 45 seconds. ReDS Pro has been shown to be as accurate in assessing lung fluid as a CT scan.
In order to improve and prepare MBBS students for the future, MediSim VR, a Med-tech company working in the field of healthcare simulation, has set up India’s first fully automated Virtual Reality (VR) lab at the Puducherry Institute of Medical Sciences (PIMS). This declaration will open the door for modern doctors in the future and is made in honour of Doctors Day today. Recently, a pre-series A round of fundraising for MediSim VR was closed.
A connected bed platform for non-ICU settings has been introduced by Dozee in collaboration with Midmark India, one of the largest hospital bed manufacturers in South Asia. Their smart bed will let hospitals keep an eye on patients’ health in non-ICU wards and step-down ICUs all the time. The AI-powered contactless sensor from Dozee is integrated into the connected bed and is placed under the mattress to track a patient’s vital signs, including heart and respiratory rates, temperature, oxygen saturation, and electrocardiogram (ECG), among others.
Additionally, it has an early warning system that alerts healthcare professionals so they can act quickly. The smart bed can also be connected to a hospital’s HMIS and a central command centre. Dozee asserts that the 98.4% clinical-grade accuracy of its AI-powered RPM sensor.
After dominating the ventilator market, Max Ventilator is prepared to grow its market share by releasing intelligent devices like monitors, ECGs, and pulse oximeters. The company has developed solutions that offer top-notch quality at a reasonable price after recognising the need for smart and innovative technology in the healthcare industry.
Understanding the Challenges for the Medical Devices Sector
Schemes like PLI introduced by Department of pharmaceuticals as well as creation of medical parks across the country underscored the intent of the government to take the country’s medical device sector to the next level. Several efforts have also been undertaken to reduce compliance burdens which will go a long way in reassuring investors and attract FDI in the sector as already evident from the first three quarters of 2022.
As per government data, nearly 80 per cent of medical devices are imported into India to meet the rising demand for quality healthcare. Meanwhile, the custom duties and taxes levied on medical devices in India are one of the highest in the world and highest among the neighbouring countries which directly impacts patient affordability and is contradictory to what the government is trying to achieve. As the preparation for the Union Budget 2023 gets underway, we expect a correction on the same.
The medtech industry expected more from the previous Union budget than it yielded. The sector requires more focus in government outlays to ensure organic growth of the industry and realise its true potential. One way to achieve this is by increasing the public health spending to meet the current gaps in healthcare demand and supply. A separate budget should also be allocated for the promotion and marketing of the medical device sector globally.
Today, India is heavily reliant on imports of medical devices, primarily from China. This dependence has only increased over the last two years and has put India in a perilous position. Further, a staggering 80% of medical devices are imported into the country to meet the need for demand for high-quality critical care medical devices. Therefore, granting access to capital investment and preferential financial support to manufacturers will go a long way in reducing overall operating costs for domestic players.
Additionally, a GST rate of 18% is levied on software, a component that is closely intertwined with the medical device. This has had a tremendous effect on the software-based services related to medical devices, making them expensive and inaccessible to patients. Therefore, lowering this GST rate will aid in accelerating the growth of medical device manufacturing in India making it a lot more cost-effective for the populous,” Mudit added.
India’s exports may reach a new high with the PLI scheme, which promotes incremental production-based incentives while diversifying exports. With the goal of achieving $1 trillion in exports by 2025, the Union Budget for 2023 could broaden the PLI scheme and consider potential industries.
Pre-Budget Recommendations to the Government from the Medical Devices Sector
Summing up, the issues which need to be addressed in the budget this year are stated in detail below:
Reduction of high customs duties to 2.5 per cent on medical devices: For products where the ability to import-substitute is still some time away; the high customs duty should be reduced. The high customs duty has adversely impacted the costs for medical devices in India which contradicts the government’s efforts to provide low-cost healthcare available to masses through various healthcare schemes.
Additionally, since the custom duty regime on most of the medical devices in many neighboring countries is lower than in India, the difference in duties created could lead to the smuggling of the low-bulk-high-value devices. The result will not only be loss of revenue for the government but also the patient will be beset with products which are not backed by adequate legal service guarantees.
Removal of healthcess ad valorem: The 5 per cent healthcess ad valorem imposed on imported medical devices has further compounded the burden on the industry. For a country that relies heavily on imports to meet its healthcare needs, an additional tax threatens to not only dent the access to advanced medical equipment coming to India but will also leave patients bearing the brunt of these additional costs adding to the inflationary spiral.
Allocation of a separate budget for the promotion of medical device industry: A separate budget of up to USD 5 million needs to be allocated for the promotion, advertising and marketing of the Indian medical device industry globally. This will help strengthen ‘brand India’ and get greater acceptability of India-made medical devices in overseas markets which will further the governments vision of ‘Make in India for the world’. It will also help in the promotion of India as destination of manufacturing and R&D in medtech.
Increase public health spending to meet healthcare demand-supply gap: India currently has only 1.3 hospital beds per 1,000 population. An additional 3 million beds will be needed for India to achieve the target of 3 beds per 1,000 people by 2025. A similar gap exists in the availability of treatment services, as up to 60 per cent of health facilities are concentrated in a handful of large cities across the country. Therefore, there is a need for focussed increase in public spending on health infrastructure especially in tier 2, tier 3 cities and rural areas.
Incentivising skilling initiatives to bridges kill gap: At present, there is an acute shortage of skilled healthcare workers, with 0.65 physicians per 1,000 people (the WHO standard is 1 per 1,000 people) and 1.3 nurses per 1,000 people. It is estimated that another 1.54 million doctors and 2.4 million nurses will be required to meet the growing demand for quality healthcare in India due to initiatives like Ayushman Bharat (PM-JAY). To meet this demand, the private sector can be encouraged to take-up workforce skilling activities along with NSDC or HSSC for which tax incentives can be provided. (MTaI members already train more than 2 lakh HCWs annually across the country).
Exemption of free medical device samples from TDS: The guidelines which were issued in June 2022 regarding section 194R of IT Act meant that even free samples of medical devices would come under TDS regime. The product samples provided by medical device companies to clinicians, enable them to get hands-on training to learn the optimum usage, application and handling of the product and sometimes to even demonstrate to the patients on how the procedure will be carried through. These samples are always marked “Physicians Sample not for sale”as per the D&C Act and Medical Devices Rules 2017 and are not to be used to generate any income. Therefore, any taxation on samples will prohibit these activities and hinder the doctor’s ability to deliver optimal patient outcome.
Increase tax exemption and benefits for patients: As the prevalence of NCD’s like heart diseases, stroke, diabetes and respiratory diseases is continually rising and is estimated to comprise 75 per cent of the India’s disease burden by 2050, therefore to enable timely treatment, preventive health checkups should be encouraged by increasing tax exemption limit from Rs 5000 to Rs 15000. Additionally, the deduction limit towards payment of medical insurance premium under section 80D should be increased from Rs 25,000 to Rs 50,000.
