Disruptive and innovative technologies are revolutionizing how healthcare is delivered today in India and have brought in tremendous growth to the sector. Indian healthcare industry has seen a 15 percent annual growth in CAGR since 2011, and is expected to reach 1,876,000 crore (USD 280 billion) by 2020. Healthcare provision remains inequitable and challenges in access to quality, affordable healthcare persist in large parts of the country.
The MedTech industry has also grown considerably during this period and plays a critical role at each stage of the healthcare continuum. It has been instrumental in improving access and affordability of healthcare services, albeit a number of ecosystem constraints continue to lead to high dependence on imports for addressing domestic demand.
As India continues to innovate and develop new technologies, global demand and potential in the near and medium term provide India with an opportunity to become a major participant in the global supply chain of medical devices. With success stories from domestic manufacturers, India is steadily developing capabilities in manufacturing medical devices. Indian players have developed expertise in manufacturing products in consumables and implants segment. In the near term, the focus needs to be on manufacturing of low- and mid-tech products, with a gradual shift toward developing capabilities for designing and manufacturing of high-tech products.
A key concern for the MedTech industry today is that irrespective of the sophistication of technology, all segments/sub-segments of medical devices are being treated uniformly by regulators and other stakeholders in the ecosystem. However, going ahead, as the industry moves toward indigenization, a differential treatment for each segment/sub-segment is necessitated. A phased approach needs to be adopted for indigenization, based on how well the manufacturing ecosystem develops for each segment/sub-segment. Only when the ecosystem matures to enable indigenous manufacturing of comparable global quality standards, tariffs and barriers need to be used to protect indigenous manufacturing. This would ensure orientation of the industry toward quality, thereby making indigenous manufacturing globally competitive.
What prevails currently is a sense of uncertainty for domestic and international players alike, indicating a need for radical and fast-paced regulatory initiatives for the sector. Preparing the eco-system for this radical change – setting up of the legal framework, enforcement (from both industry and government ends), and improving infrastructure and reimbursements are some of the steps that will help the market thrive automatically. Above all, access to safe, quality, affordable healthcare will definitely improve and the patient will benefit.
Global Market Dynamics
The global MedTech market is expected to grow from nearly USD 371 billion in 2015 to almost USD 529.8 billion in 2022, reflecting a seven-year compound annual growth rate (CAGR) of 5.2 percent.
In vitro diagnostics (IVD) will be the largest device area in 2022, with sales forecast to reach USD 70.8 billion, representing 13.4 percent of the industry's total sales, predicts EvaluateMedTech. Roche's sales of diagnostic tests are expected to reach
USD 12.8 billion in 2022, giving the company a market share of 18.1 percent. Sysmex is the fastest growing IVD brand in the top ten with an annual growth rate of 10.2 percent between 2015 and 2022. This will push the company up two places to sixth in the 2022 rankings.
Cardiology takes the second spot, with annual sales increasing to USD 62.3 billion in 2022 from USD 42.1 billion in 2015-16. Medtronic retained its position as the top cardiology company in 2015-16 and is forecast to remain the world's leading heart device maker in 2022, with an expected market share of 22.6 percent. Following Abbott's acquisition of St. Jude, it will become the second-largest cardiology company, with 2022 sales forecast to reach USD 9.9 billion.
Neurology is forecast to be the fastest-growing device area, with a CAGR of 7.6 percent between 2015 and 2022.
Diagnostic imaging is estimated to be the slowest growing device area, with its CAGR between 2015 and 2022 expected to be only 3.7 percent. The market is set to grow from a global total of USD 38.9 billion in 2015-16 to USD 50.3 billion in 2022. Siemens is expected to remain the world's leading diagnostic imaging company in 2022 with 23.6 percent of the market. GE Healthcare will follow closely with a 20.3 percent share.
Johnson & Johnson (J&J) will remain the world's number one orthopedic company in 2022, despite substantial growth for Zimmer Biomet, which is expected to expand by 7 percent (CAGR) and hold 20.6 percent of the market in 2022.
Lens maker Essilor International will be the leading company in ophthalmic technology in 2022, with sales of USD 10.2 billion. Novartis takes second place with sales of USD 7.9 billion. J&J's upcoming acquisition of Abbott Medical Optics will allow the company to retain its third-place position in 2022, with ophthalmic sales forecast to reach USD 4.8 billion.
Indian Market Dynamics
The Indian MedTech market grew at a 10–12 percent CAGR in the past 5 years, reaching a value of 26,048 crore in 2015-16. From 2015 levels, if the industry continues on its organic growth trajectory, it is expected to reach 55,040 crore by 2020, growing at a CAGR of around 15 percent against the expected global industry growth of 4–6 percent. Four industry segments have been considered: consumables and implants; diagnostic imaging; instruments and appliances; and patient aids and others.
Instruments and appliances represent the largest segment of the MedTech industry in India, constituting 34 percent (8856 crore) of the total industry size in 2015-16. It is expected to grow at a rate of 15 percent over 2015–2020. Growing at a compounded annual growth rate (CAGR) of 19 percent, therapeutic appliances are expected to lead the growth for this segment.
Diagnostic imaging represents the second-largest segment of the medical devices industry in India, constituting 31 percent (8075 crore) of the industry in 2015-16. It is expected to grow at a rate of 13 percent over 2015–2020. Building on the existing installed base of electro-diagnostic and radiation apparatus, imaging parts and accessories are expected to lead this segment, growing at a CAGR of 15 percent over the next few years.
Consumables and implants constituted 19 percent (4949 crore) of the industry in 2015-16. It is expected to grow at a rate of 14 percent over 2015–2020.
Patient aids and other products is the fastest growing segment of the medical devices industry in India and constituted 16 percent (4168 crore) of the total industry size in 2015-16. It is expected to grow at a rate of 19 percent over 2015–2020.
A majority of this growth is attributed to the growing adoption of various healthcare solutions by healthcare providers in order to meet the heightened regulatory requirements for patient care and safety, increasing need to curtail the soaring healthcare costs, and growing need to improve the quality of healthcare while maintaining the operational efficiency of healthcare organizations.
2017 will prove to be a year of innovation as MedTech players rush to implement new technologies that enhance the patient experience, while many of the challenges persist.
Digital technology adoption is already gaining prominence in Indian healthcare industry, with efforts from both the public and private sectors. The government has launched several initiatives such as Digital India, Smart Cities, Aadhaar, and Telemedicine centers, in some cases with support from the private sector. These initiatives have been largely influenced by a rising number of digital health start-ups. Some of the most widely discussed digital technologies that are being used to create healthcare solutions in India include:
mHealth is probably one of the largest sectors within digital healthcare in India, with an estimated market size of 2.1 crore in 2015-16, which is set to rise to 5.2 crore by 2020. Acceptance of mHealth is increasing simultaneously. A study showed that 68 percent of doctors in emerging markets recommend mHealth and 59 percent of patients are already using it. Mobile apps, especially those connecting doctors to patients and enabling remote consultations, are a major segment within m-Health.
Remote diagnosis. Low-cost portable innovations are being developed in India to cater to the needs of its vast rural population. India's remote healthcare delivery market is expected to grow at a CAGR of 20 percent. These products help increase access to healthcare for remote and rural populations by providing point-of-care diagnostics, teleconsultation, and e-prescription capabilities.
Telemedicine is the use of technology for remote diagnosis, monitoring, and education. While telemedicine is usually categorized under remote diagnosis, the size of its market in India allows us to consider it as an independent segment. India's telemedicine market is expected to grow by over four times by the end of 2016. Telemedicine has helped bring down provider and patient costs as well as provide care in the most remote areas. India is ahead of the curve on the global scale.
Digital and social connectivity. Social connectivity is an upcoming trend. Social media is prominent in India, with an average person spending 25 percent of time on social networking sites, courtesy improved telecom infrastructure. In healthcare specially, this has been in the form of patient support communities and knowledge portals on the patient side. On the provider side, this has prompted the emergence of digital chat platforms where medical professionals share knowledge and ask for help. There are also communication technologies that help connect doctors around the world for both a second opinion and training. The Indian government, for instance, via the National Optical Fiber Network is connecting 250,000 gram panchayats in the country to the Internet, which will aid the expansion of e-health.
Wearables. Initially, wearables in healthcare were devices that could track diet and fitness activity and were known to improve diet and exercise outcomes. Now, wearables are being increasingly used to measure basic health parameters such as heart rate. The overall healthcare wearables market in India is currently valued at 30 crore and is expected to increase in value as wearable technology is beginning to expand. For example, there is a wristwatch that acts as a personal emergency response system and relays medical and GPS data to a remote server.
Big Data. Big data is slowly entering the Indian healthcare landscape. Different healthcare players are now realizing the value of combining consumer insights and internal company data to inform and optimize their product offerings, and are accordingly increasing investments in the necessary tools. In this way, the healthcare system can pull consumers toward them and share these insights to work with other players in the space.
Smart Cities. Cities have begun to use technology to enhance the use of resources within the existing infrastructure.
Electronic medical records (EMRs) are beginning to be adopted by healthcare providers. This digitization has paved the way for advanced IT systems, such as health information systems and cloud computing to increase remote and ubiquitous accessibility to patient data. This should help reduce medical errors and improve health outcomes.
The world is rapidly becoming more digital, and any business not realizing and incorporating this trend will fall behind. India has the potential for digital growth, given its current technology penetration, advancing economy, growing population, and accelerating healthcare industry. The rise of digital technology is pushing India to achieve health for all, putting the country at the forefront for foreign investment. With these opportunities, India is emerging as the global leader in digital health.
In 2017, the MedTech industry will begin to lay down new paths to a more connected, transparent, convenient ecosystem of care. Forging new ways of receiving, paying for, and delivering care is a hallmark of the creation of a new health economy – an industry that is more digital, nimble, responsive, and focused on consumers. As organizations master these tools and services, they will combine them in new ways, form new partnerships, and ultimately transform the industry.