By Rajneesh Bhandari
The market for Medical Technology (MedTech) and devices in India is USD 11 billion, which is expected to grow exponentially to USD 50 billion by 2025. However, there is limited indigenous manufacturing, and imports constitute over 80% of the market. India has the lowest per capita spend ($3) on medical devices among BRIC nations compared with Brazil ($28) and Russia ($43), and this presents a massive opportunity for MedTech startups.
There has been a change in this trend in recent years, and now India is starting to become a hotbed of MedTech innovation. Instead of adopting western products, Indian innovators are developing path-breaking MedTech products and solutions. India has reached an inflection point, and the HealthTech/ MedTech ecosystem is rapidly expanding.
In March 2020, Niti Aayog came up with one of the world’s most futuristic telehealth regulations, which, combined with the pandemic, has helped exponentially scale the adoption of telemedicine. Moreover, the National Health Stack by the Niti Aayog and the digital health mission, which aims to aggregate the electronic medical records, will provide a further fillip to startups, like UPI and the India Stack did for fintech.
Most Medtech startups face three challenges in the early stage. The first is clinical trials and validation. The government is the largest healthcare provider in India. If the government could set up an organization to facilitate early validation of MedTech devices and services, it could exponentially accelerate the development and deployment of various technologies in healthcare.
The second challenge is common for all startups. Over 95% of startups fail, primarily because they are not able to acquire the initial set of customers. As the government is the largest healthcare provider, there has to be a mechanism for the government to become the early adopter of innovative products and services. Unfortunately, the government procurement is based on L1 procurement, and the government has no mechanism for procurement of “innovation.” Further, the public procurement policies require “previous government orders” and a minimum of three participants in a tender. If a product is genuinely innovative, there will always be a first time, and an innovative product with IP will not have three companies participating in a tender.
The central government has reinforced the “Make in India” initiative with a series of orders, including procurement from local manufacturers up to 200 crores and procurement through Government e-marketplace (GEM). Presently, there is no preference for “Make-in-India” in most state government procurement. However, preferential procurement from local manufacturers by state governments will go a long way in developing local manufacturing capacity, including setting up manufacturing plants by international companies.
AI will fundamentally transform healthcare in the near future. Medical technology innovation can be the tool to make modern care accessible and affordable to all by lowering the cost of the product or delivery. This brings me to the third challenge. For the development of AI and its large-scale adoption in healthcare, AI startups will need large amounts of anonymized data. As the public healthcare system is the largest healthcare provider, it generates the largest amount of data. Therefore, the government needs to develop a platform for the availability of anonymized data to develop AI in healthcare.
India has all the essential ingredients for the exponential growth of HealthTech and MedTech, including a large population, a robust pharma, and medical supply chain, 750 million smartphone users, third-largest startup pool globally with easy access to VC funding, and innovative Tech entrepreneurs looking to solve global healthcare problems. As a result, the Indian startups will lead the next wave of healthcare innovations globally.
(Rajneesh Bhandari, Founder NeuroEquilibrium, the world’s first chain of vertigo, dizziness, and balance disorder clinics. Views expressed are personal and do not reflect the official position or policy of Financial Express Online. )
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