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MED-TECH COUNTRY STRATEGY : AN INSIGHT
Med-Tech in India is evolving . As we join hands to understand and address the different elements of the sector , we spoke to Mr . Probir Das , Managing Director , Terumo India and Chairman of Medical Devices Forum , FICCI , who lucidly brought out the challenges and the way forward to leap-frog as a Med-Tech major in the global map .
THE BIG IDEA :
Development of Med-Tech strategy depends on multitude of factors , such as : the level at which strategy is being addressed ( at an enterprise level ); types of devices being considered , the organizational life cycle in which the strategy is being looked at and the intent of the strategy ( start-up or scale-up ).
BUSINESS MODEL :
At a country level strategy , the connect conjunction of India is always China ! However , the per capita consumption of medical devices in China is approx $ 150 USD , which is similar to the UK ; but that of India is $ 3 USD per capita , worse than some of the Sub-Saharan countries . Therefore , as we talk of making Med-Tech environment attractive to the global players , we must scale up our currently very low consumption patterns . Meaning , stand-alone increase in consumption is not possible . Overall strengthening of the healthcare service delivery system is essential for Med-tech growth in India . This health system strengthening model is an approach to the ' consumption driven ' growth model of the med-tech sector .
The other approach is the manufacturing or export driven business model , as successfully demonstrated by Ireland . Ireland with a meagre 8mn population is one of the largest manufacturers and exporters of Med-Tech to the world . As against the earlier consumption led strategy , this is a ' competition led ' strategy that encourages manufacturing to support the world ' s requirement . In order to create an ecosystem to encourage growth of clusters of manufacturing , Ireland has retained its corporate taxation rates as one of the lowest in the world , along with forming investor friendly infrastructure , the combination of which facilitated countries globally to re-locate themselves to Ireland . This can be a pure business model of " Make in India for the World ", with limited local social implications , but strategically looking at quickly attracting MNCs .
It ' s important to understand why I suggest a focus on MNCs . Sixty percent of the Med-Tech market share globally is vested with about 40 top companies . Why it is so ? Unlike many others , Med-tech is a complicated industry that requires wide knowledge across engineering and medical sciences , retain much of the residual know-how and high level of domain expertise / depth of knowledge . Therefore , if we were to attract even 10-15 of these top �rms to partner with India , to make India as their manufacturing hubs , there ' s a need to evaluate what kind of bene�ts can attract such entities — tax holidays , export freedoms , clustered infrastructure , etc ....
Pure manufacturing apart , the successful ecosystem led business model of Med-Tech thrives on what I call the Med Tech DNA Trinity :
1 . Steady supply of high quality engineers , which India has .
2 . Availability of strong academic institutions in medicine to support unmet need identi�cation , and testing and validating research ideas .
3 . Availability of high quality research institutes , such as the Stanfords and the MITs of the world to nurture innovation .
Ideas �ltered in the research institutes can be tested in the medical institutions for their ef�cacy and manufactured later by the engineers . While , India has engineering skills , it seriously lacks in access to academic and research institutes .
CHAMBER OF SECRETS :
The demand driven model to wait for increased demand to trigger increased consumption is not only a rudimentary model , but is also an untenable model , since it will need medical skills to scale up signi�cantly in India , and this will take time .
Therefore , the manufacturing model to become the global supplier of the med-tech to the world is a better model . However , unlike other manufacturing units , which are run-of-the-mill productions , needing multiple plants to ful�l the d e m a n d s o f c o n s u m e r s , M e d - Te c h manufacturing is ever evolving . Manufacturing here is essentially fed with Innovation , hence smaller plant sizes with limited manufacturing sites . This in turn needs engineering science interacting freely with medical science , end-toend incubators bridging across the current mistrust between stakeholders , who today u n f o r t u n a t e l y o p e r a t e i n w a t e r t i g h t compartments . Thus , " Working together to Innovate is the DNA for the growth of Med- Tech ".
KEY SUCCESS FACTOR :
On the demand side the success of manufacturing model requires skilled manpower , which takes time , especially when there ' s a serious shortage of skilled medical / clinical human resource . However , on the supply side it is relatively easy if we are cognizant of the challenges and take quick pragmatic steps , build strategies and policies with active engagement of stakeholders to increase participation of global �rms and shortening our learning curve , as we work alongside them . Ireland took a decade to reach to reach where it is today , we can learn from them and become ef�cient by re-engineering .
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MY ADVICE TO START-UPS :
I see that many present day start-ups look for making a quick App and sell solutions to earn fast money . Nothing bad there , but for longer term success , this may not be the right attitude in a socially accountable domain like health sector . My advice to start-ups is : " self - motivation is the key to thrive , even before you can actually succeed ". I say this because , I have seen excellent ideas hitting valley of death within 6-8 mnths of starting-up . These happen for mainly three reasons :
1 . Lack of strong mentoring system — Dif�cult to access the professors and mentors in the academic or business environments ( both medical / engineering and business ) seamlessly , during your learning process . And without complete integration of mentoring in the sciences you are lost at sea .
2 . Financing mechanism or angle investments for start-ups is poor — BIRAC was created as a model to boost bio-tech sector , but med-tech segment has stayed fatherless until date and has no distinct vehicle to promote ideation stage innovation . While funding for a proven idea is not a challenge , raising the �rst INR 50lakhs to sustain self and the idea ( feeding its requirements of machinery , parts , testing , validating prototyping etc ) even in a boot strap model do not have many angle funders . Meaning , we have business risk takers , but no technology risk takers , thereby restricting freedom to experiment in the stage of innovation .
3 . Lastly , easy access to high quality institutes is missing for the researchers to seamlessly interact and integrate . The current education system operating a strictly disciplined environment is stiff enough to allow easy access , across departments and streams of science to accelerate learning .
So my advice would be to stay self-motivated to thrive . And I am optimistic that in the current political environment , with the ' Make in India ' agenda for the World , the Med-Tech sector is poised to leap-frog into the global platform as we work together in absolute harmony with each other across science and stakeholders .