India & med tech : the sub-optimal state

23 Nov

Public-funded institutions and government agencies are increasingly supporting India’s nascent medical technology sector either as research or funding partners. Yet, what the state is so keen to help sow is it also equally willing to nurture? Not really.

First, here are some instances of public funding or research partnerships of indigenous companies.

-Mysore-based Skanray, a local start-up manufacturer of imageing equipment such as X-Ray machines and electrocardiogram (ECG) units and in the news recently for purchasing the medical equipment business of Larsen & Toubro  is a beneficiary of funding from the government of India’s Technology Development Board. This funding is meant to encourage the penetration of affordable diagnostic technology to rural India.

-New Delhi’s Consure Medical that has developed a device for fecal incontinence is the first start-up that was spun out from a fellowship programme that is jointly funded by India’s department of biotechnology (DBT), its ministry of science and technology, Stanford University and others.

Consure’s collaborators include the government-funded Indian Institute of Technology and the All India Institute of Medical Sciences (AIIMS) based in the capital. One of its VCs, the Indian Innovation Fund, has an institutional investor in the form of the government of India.

-Bigtec Labs, a Bangalore company attempting to reduce the time and cost of diagnosing infectious disease, has been funded by the government’s apex laboratory Council for Scientific and Industrial Research and has research collaborations with Bangalore’s Indian Institute of Science, among other public-funded labs.

-Forus Health is a Bangalore-based company that has built a portable, pre-screening tool that can help detect eye problems such as cataracts, glaucoma and diabetic retinopathy early to prevent avoidable blindness especially in rural areas where medical services aren’t easily available. Forus is privately funded but it collaborates with the Indian Institute of Science and the Indian Institute of Technology, Kharagpur for research.

-Perfint Healthcare is a Chennai-based start-up that has developed robotic aids for procedures such as tumour ablation and biopsy so that more doctors can attempt them.  Perfint is funded by private equity investments but it has also availed of soft loans from India’s DBT.

There are no doubt others. The amounts involved are small and the effort to avail of them, as with any government funding programme, has got to be painstaking. Yet, when you run through this list you get the impression of a state that acknowledges the need to encourage indigenous med tech.

But consider the following and you get a very different picture.

-India did not regulate medical devices and equipment until, in 2005, it was forced to do so by an Indian court.

-India has no separate law to regulate medical devices and these are summarily, and inappropriately, lumped under the Drugs & Cosmetics Act.

-Two separate ministries presented two different Bills governing med tech a few years ago. So first there was no law, then too much of it. The Prime Minister’s office had to step in to choose one.  But all this effort has yet to amount to anything for the chosen Bill hasn’t been tabled in Parliament.

-Currently, the Drugs Controller General of India administers only fourteen categories of devices which clearly don’t cover everything.

-India still penalises local manufacture of med tech by taxing imports of finished goods lower than raw material imports.

-India still lacks the entire gamut of capabilities needed to emerge as a world-class manufacturer but is doing precious little to create it

In other words, the policy and regulatory environment in which the local med tech sector operates is moribund.

This is unfair to consumers and manufacturers. For one, it deprives consumers of the confidence of switching to made-in-India products. For manufacturers, it creates unnecessary confusion if there are no set standards to follow. Weak oversight also means that honest operators are forced to compete with unscrupulous ones.

It also gives the competition a stick to beat Indian companies with. Given the tremendous export potential for affordable med tech, this can only make going global more of an uphill climb than it ought to be.

In an interview with Apothecurry in early September, Gautam Khanna, chair of the medical devices forum at the Federation of Indian Chambers of Commerce and Industry (FICCI) said : “We are probably the only industry asking for regulation. It helps importers and it helps Indian companies.”  But asked when this might possibly happen, he had no answer.

On the policy front too little has been done by the government to follow its own suggestions such as augmenting testing facilities, or creating manufacturing clusters.

For starters, it would help if the government pushed through legislation in Parliament on a priority basis.  Then, the regulatory function that administers the law at the Central and state level has to be strengthened.  In parallel, the government ought to encourage local manufacturing using the various fiscal and non-fiscal tools at its disposal. (Suggestions abound. See here for a sample).

Some entrepreneurs also believe that availing funding from government agencies can be made a lot less cumbersome and time-consuming.

India still imports over 70 per cent of its medical technology requirements. This is showing up in the cost of healthcare. By funding and partnering with start-ups, the state has made a promising, if small, start to correct this.  But by no means can it stop there.

Pic sourced from kochbr’s photostream on flickr

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4 Responses to “India & med tech : the sub-optimal state”

  1. Vicky Kothari November 23, 2012 at 12:42 pm #

    Rightly said.
    I would also like to point out the other side of the coin which is at times missed out.
    It is the outcome of lack of regulation which at times creates a favorable environment for innovation.
    Regulation must come in, no doubts about that.
    However, government must ensure that the regulation does not become a roadblock for new technologies which are cheaper and more suitable for Developing economies.

    Like

  2. Neelesh Bhandari MD November 29, 2012 at 8:52 pm #

    Excellent post. It was good to know about all the initiatives in low cost med-tech being backed by GOI. This lack of guidelines has been a hurdle for entrepreneurs for long. The current techno-bureaucrat team has the vision but lacks the bandwidth to realize it.

    Its time the GOI pays attention to such details which will add to our competitiveness globally.

    Like

  3. Cartik Sharma November 30, 2012 at 8:18 am #

    India, the birthplace of innovation for products has to come to terms with the stark realty of a 1billion population with desperate requirements of large strides in medical devices.

    The current state of the economy indicates a boom, notwithstanding government backed export regulations and a resonating, vibrant middle class entrepreneurial spirit. In stark contrast, medical devices is the neglected, underdeveloped and reticent sector with requirements for large scale healthcare reform and progress.

    Global innovation mandates the Indian economy to develop home brewed healthcare informatics and medical imaging product solutions based on software, demographics and
    support of investment from large industrial houses locally and globally.

    To catch up with European superpowers for healthcare improvement as well as
    advances in medical devices, the mantra should be
    “Greater progress through pervasive healthcare!” I’d welcome India join global innovation in medical product development and usher a wave of reforms towards healthcare innovation.

    I hope that will follow closely, the economic reform in pharmaceuticals and explosion in growth for the chemical industry.

    Like

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