The Indian medical electronics device industry has been growing at an average of 17 percent for the past few years and expected to reach close to US$ 6.5 billion by the year 2020. Here we present a brief overview of the market
By Sudeshna Das
The strong growth of the Indian economy also provides a boost to the country’s healthcare industry. This, in turn, creates a huge demand for electronic components, devices and products that are used for medical purposes. Medical electronics technology reinforces the existing healthcare infrastructure in various ways, right from digitising medical tests, diagnostic and therapeutic procedures, to enhancing the reach of healthcare through telemedicine and health information technology.
A rise in the number of hospitals and an increased requirement for healthcare facilities create a need for sophisticated devices and equipment, which can provide accurate treatment to individuals. Medical electronics equipment/devices enable control, conversion, sensing, processing, storage, display and transfer of information on human anatomy and physiology by making use of electronics and communication technologies.
This discourse will provide an overview of the Indian medical electronics market with respect to size, growth drivers, major segments, trends, opportunities and challenges.
There are varied understandings of what constitute medical electronics. In this article, medical electronics refers to all electronic devices and equipment used in the diagnosis, treatment and monitoring of patients. It does not include surgical devices, consumables like gloves, reagents and non-electronic implants used in treatments like orthopaedic and dental.
Market opportunity
Use of electronic equipment in the medical field for clinical and research purposes has been enhanced tremendously in the past few years. Human body generates numerous signals that are highly significant for diagnosis and therapy. These signals are collected from the body surface or from within, through electrodes of different sizes, shapes and types.
Moreover, there are non-electrical body parameters like temperature, blood flow, blood pressure and respiratory functions that need to be routinely monitored. These parameters are converted into corresponding electric signals by various transducers, and here comes the role of electronics. Extensive use of computers and microprocessors is now introduced in medical instruments designed to perform routine clinical measurements, particularly in those situations where data computing and processing could be considered as part of measurement and diagnostic procedures.
Key drivers for the Indian medical electronics market
- Economic growth leading to higher disposable incomes
- Increased public spending in healthcare
- Increased private investment in healthcare
- Increased penetration of health insurance
- Emergence of new models of healthcare delivery
- Public private partnership route to innovation
The medical electronics industry has achieved double-digit growth in recent years, and this growth trajectory is expected to continue owing to the rising incidence of chronic diseases, increased urbanisation and a growing elderly population and increased awareness about latest technology solutions to save, augment life and rehabilitation.
According to a Deloitte report, the Indian medical electronics device industry has been growing at an average rate of 17 per cent for the past few years and is expected to reach close to US$ 6.5 billion by the year 2020 (Fig. 1).
Semiconductors play an important role in shaping the medical electronics device market. That market, in turn, may represent a significant growth opportunity for semiconductor players.
Performance of medical electronics devices relies on innovations from semiconductor players—highly-integrated microchip designs. Use of semiconductors is critical from power supplies to displays in medical equipment. Semiconductors are an integral part of most medical equipment, starting from high-end imaging to small handheld devices. Role of semiconductor suppliers becomes more critical as medical equipment move towards portable and smaller ones.
According to Frost & Sullivan, the medical electronics market (including final products and semiconductor components) in India is likely to reach US$ 11.7 billion by 2017.
Growth drivers
Growth of this sector in the country has been driven by various market and non-market factors. Growing population, ageing fraction of population, enhanced income base and associated disposable income, increasing socio-economic inclusion of subalterns in the mainstream economy are some market factors that have created demand for customised medical electronic products to cater to the needs of all income segments, changing the disease prevalence pattern.
Moreover, growing awareness among the middle class to focus on early detection and prevention of non-communicable diseases like cardiovascular diseases, diabetes, cancer, strokes and chronic lung diseases is expected to generate demand for medical electronic equipment and disposables. For example, X-rays and other imaging equipment, pathological analysers, probes, mains and battery-operated devices, mobile detection and therapeutic equipment, equipment for sanitising and infection protocols, robotics and radio therapeutic equipment, cardiovascular and neurovascular detection, bionics, systems along with modular life-support systems, patient monitoring, internal and external implants, minimally-invasive and non-invasive surgery, distant monitoring, diagnosis and remedial management will be in demand.
Further, various non-market factors including favourable regulations, FDI inflow, emergence of India as a favourable destination for outsourcing of manufacturing and R&D activities and government initiatives to improve healthcare access through insurance schemes will fuel the growth of medical electronics.
Market mix
The medical electronics equipment/devices can be broadly bucketed under the following sub-categories (Fig. 2):
- Imaging
- Patient monitoring system
- Therapeutic
- Handheld/homecare products
According to industry sources, MRIs, CT scans, colour dopplers, cath-labs and ultrasound scanners are a few fast-moving categories contributing to around 70 per cent of the imaging market. This market is primarily catered by import. Requirement of high precision level is the major hindrance for domestic manufacturing of imaging equipment. CT scans and MRIs are high-value, low-volume equipment used in tertiary care and high-end diagnostic labs. X-ray machines are the largest-selling imaging equipment in terms of volume.
The market for patient-monitoring systems is a mature one, which is largely driven by replacement sales. Bedside monitors account for more than 50 per cent of the patient-monitoring systems market in India. These are available with various features depending on the number of parameters displayed. Moreover, electrocardiogram machines are another important product under this category.
The patient monitoring system market is catered by domestic production and imports. High-end patient monitoring systems are largely imported but relatively less complex products with basic features are manufactured locally.
Emerging technologies in the Indian medical electronics market
- Miniaturisation through efficient system-on-chip designs
- Wireless integrated circuits
- Efficient power management
- Intelligent sensor
- Connected information technology infrastructure
(Source: Frost & Sullivan)
Increasing cases of chronic respiratory diseases and kidney failure drive sales of ventilators and dialysis equipment, respectively. Ventilators and dialysis equipment together account for around 50 per cent of the therapeutics market. Ventilators are mostly used in tertiary- and secondary-level healthcare. Currently, dialysis equipment is limited to metros and tier 1 cities catering to only about five per cent of the patients in need of dialysis.
More affordable products may help the industry capture the untapped market. Therapeutics market has an almost equal contribution from domestic manufacturing and imports. High-end equipment like dialysis machines, biphasic defibrillation machines and the like are mainly imported. Lower-range therapeutic equipment are manufactured domestically.
Digital thermometers, glucometers and digital hearing aids are some fast-moving products in the handheld/homecare equipment market. Glucometers contribute to around 57 per cent of this market. An increasing number of diabetes cases drive the blood glucose monitoring equipment market. Handheld/homecare equipment market is highly import-driven, mostly because these products are sold over the counter.
Therefore the industry focus is more on marketing rather than manufacturing. However, digital thermometers and hearing aids are being manufactured domestically by unorganised players on a very small scale.
Sourcing of semiconductor components (Table I) used in medical electronics is completely import-dependent. Cost of electronic components in medical devices varies typically between 25 and 50 per cent (Table II).
Market trends
In India, medical devices need to be made for Indian operating conditions. According to a Frost and Sullivan study, for providing healthcare, which is universal, affordable and preventive in nature, the Indian medical electronics industry is shifting towards developing miniaturised, multifunctional, ultra-low-power, portable and reduced-cost devices that could be used for patient monitoring, imaging, implantable, therapeutic and surgical requirements.
The wearable devices category, which is still a developing field in India, can potentially aid physicians to offer extended care outside the clinical environment. This would bring higher efficiency and increased access across tier 2 and tier 3 cities and rural India, while providing improved healthcare delivery to urban India.
Policy support for Make in India
With the current Make in India vision in the country, there is a huge opportunity for growth and expansion of the medical electronics industry. Union Finance Minister, Arun Jaitley, in his budget speech, urged the industry to invest in manufacturing medical equipment in India. Prime Minister Narendra Modi also made a statement that medical equipment was gaining increasing importance in the field of healthcare, and the need of the hour is for India to manufacture such equipment, as part of Make in India programme.
The National Policy on Electronics has medical electronics as one of the thrust areas and provides for financial incentives for medical electronics manufacturing not only for new units but also for units relocating from outside India. The Drugs and Cosmetics (Amendment) Bill, 2013, is now considering recognising medical devices as a separate category from pharmaceutical products in the regulatory structure. A strong framework that provides for medical devices standards in India is imperative to boost domestic manufacturing, bring in reliability and better time to market new technologies in medical electronics.
Recently, a memorandum of understanding was signed between Society for Applied Microwave Electronics Engineering & Research (SAMEER) and the government of Andhra Pradesh, on conducting joint and comprehensive assessment of health technologies as identified, starting with dual-energy linear accelerators for cancer care development. SAMEER is an R&D laboratory of the Ministry of Electronics and Information Technology, government of India.
Moving forward
The Indian medical electronics industry is till date highly under-invested and import-driven. According to a Boston Consulting Group report, India imports an estimated 70 per cent of medical devices. Lack of maturity in this sector with respect to penetration, accessibility, affordability an
d awareness possess major constraint for the growth of this sector in India. Moreover, nascent regulatory environment, no distinct status of the industry, need for quality benchmark at par with global standards and high capex requirement also slow down the growth of the indigenous manufacturing ecosystem.
However, an FICCI report cited examples showing a slow but gradual move towards Make in India in this sector. Sector players have undertaken endeavours to start manufacturing innovative products in India, which are suitable for domestic as well as overseas markets. For example, Transasia Biomedicals has developed in-vitro diagnostic equipment through its R&D base in Mumbai, Roche Diagnostics has developed a screening device for cardio-vascular diseases, suitable for use in rural settings, and GE Healthcare has developed a low-cost ECG machine and a low-cost ultrasound machine for the Indian market. Philips Healthcare has been using its recent acquisitions in India to develop and launch a low-cost cath lab for the Indian market.
The same report also mentions global investment in this sector. Global companies have started considering India as a manufacturing base by either setting up facilities of their own or by acquiring domestic manufacturers. Some examples include 3M’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 Medtronics and Alpha X-Ray Technologies.
Medical technology parks have been proposed by the government in addition to existing parks to encourage domestic manufacturing of medical equipment. Inflow of FDI will spur both R&D and manufacturing, in turn, increasing the efficiency and effectiveness of medical electronics products.
Advancement of medical electronics product quality and associated successful diagnostic rates are expected to create a spurt in adoption. India as an emerging market continues to be relevant in the global medical electronics space, not just from a market point of view, but also as a global hub for innovation and manufacturing.
