Opportunities in the Indian Medical Technology Sector

May 2020

INDIAN MEDICAL DEVICES INDUSTRY: OVERVIEW

USD 10 billion Indian MedTech

Sector (2019)

Market Size

Source: Biospectrum, US-DoC

USD 14 billion Indian MedTech

Sector (2025 E)

80%Medial devices used in India

are imported

15%of India’s medical device

imports comes from the USA

IMPORTSUSD 5.1 billion

EXPORTSUSD 1.7 billion

2019

Sales Potential

USD 13.9 billion

Investment Potential by 2025

USD 9.3 billion Source: Medical Technology Association of India

India is an import driven market for both - raw material and finished products

9%

8%

9%

8%

16%

40%

10%

Stents

Implants

Patient Aid

OrthopaedicprostheticsConsumables anddisposablesDiagnosticimagingEquipment andinstruments

Medical Devices industry

0.2

0.7 0.8

0.40.6

1.3 1.2

0.7

1.8

2.9

2.3

1.6

0

0.5

1

1.5

2

2.5

3

3.5

Consumables &Implants

Instruments &Appliances

DiagnosticImaging

Patient Aids &Others

2008 2014 2020

Growth (USD billion)Segments

India is the 4th largest MedTech market in Asia

Source: FICCI Source: Healthcare Federation of India

INDIAN MEDICAL DEVICES INDUSTRY: SEGMENTS’ SHARE & GROWTH

USD11

billion

Estimated Indian medical market by

2022

Consumables and ImplantsStents, syringes, needles, catheters, sutures, bandages and dressings

Instruments and AppliancesSurgical and non-surgical equipment, and other instruments and supplies

Diagnostic ImagingElectro-diagnostic apparatus, radiation equipment, imaging parts and accessories

Patient Aids and OthersHearing aids, prosthetics and orthotics, pacemakers, dialysis equipment and others

USD1.6

billion

USD2.9

billion

USD2.3

billion

USD1.7

billion

Source: IBEF, Deloitte & Healthcare Federation of India

INDIAN MEDICAL DEVICES INDUSTRY: SEGMENTS’ OVERVIEW 2020e

PILLARS OF

GROWTH

• Non-communicable diseases—46 million diabetes patients, 62 millionheart disease patients and 23 million patients of chronic obstructivepulmonary disease - are expected to comprise more than 75% of India’sdisease burden by 2025.

Growth in non-communicable and chronic diseases

• India’s old population is expected to reach 200 million by 2025 and 300million by 2050.

Ageing population

• Health insurance coverage is expected to reach 655 million by 2020.• Household expenditure on healthcare is expected to increase by 13% by

2025.

Increasing health insurance coverage

• Medical device is one of the 25 focused sectors identified by the Indiangovernment as a part of the Make in India initiative.

Focus of Make in IndiaOTHERS

Others include Medical Tourism, rising income & awareness

INDIAN MEDICAL DEVICES INDUSTRY: GROWTH DRIVERS

HaryanaLow-End Medical ConsumablesBoston Scientific Corporation,

Beckton Dickinson India

GujaratPharmaceuticals

3M, Bayer AG, Meril Life Sciences, Envison Scientific, Invent Bio Med, Sahjanand Medical Technologies

MaharashtraPharmaceuticals

Johnson and Johnsons, Phillips Healthcare, Siemens, TrivitronHealthcare, Danaher Corp., Remi Laboratories

KarnatakaInsulin Pens, Stents & Implants, Medical ElectronicsGE Healthcare, Biocon, Medived, BigtechLabs, Prognosys Medical, Skanray, OptaCircuits

Andhra Pradesh, Telangana

Medical ElectronicsSt. JuMedtronic, des Medical, Relisys Medical Devices, B Braun

Tamil NaduMedical Electronics

Trivitron Healthcare, Opto Circuits, Perfint Healthcare, Phoenix Medical

Systems, Cura Healthcare, Schiller, Roche

INDIAN MEDICAL DEVICES INDUSTRY: MANUFACTURING CLUSTERS

01 02 03 04 05 06

QUALITYLaunch of ICMED QualityAssurance Certification byQuality Council of India

Correction of Inverted Dutiesfor 78 Devices (January 2016)and 5% Cess added on to BasicDuty on (March 2020)

DUTIESMedical Device Regulatory Frameworkseparated from Pharma beingimplemented in phases by Ministry ofHealth & Family Welfare

REGULATORY FRAMEWORK

MANUFACTURING FACILITYMedical Device Parks to createa conducive cost-effectivemanufacturing environment

A Preferential Market AccessPolicy to protect investmentsand support Indigenousmanufacturing.

POLICIES

ENABLERSInvest in providing facilitationservices to investors as Makein India enablers

INDIAN MEDICAL DEVICES INDUSTRY: CHANGING ENVIRONMENT

• X-Ray equipment

• MRI imaging

• Medical scanning equipment, diagnostic kits

• Reagents

• Ultrasound

• Dentistry equipment

• Operation theatre equipment

• Equipment for physiotherapy and pathology

• Products for orthopaedic treatment

• Equipment for eye surgery

• Equipment for ENT treatment and surgery

• Equipment for neurology treatment and surgery

• Equipment for oncology treatment and surgery

• Products for the treatment of burns and post-injury skin treatment

• Hospital furniture (bedding, operation table, stretchers, storage cupboards)

• Anaesthetic equipment and products

• Ambulance with emergency medical attention facilities

• Equipment for dialysis, etc.

• Machinery for the manufacture of medicines and drugs

• Hand- held diagnostic equipment, e.g. like blood sugar testing/blood pressure

testing, etc.

INDIAN MEDICAL DEVICES INDUSTRY: OPPORTUNITIES

Valued at USD 10 billion in 2019

Growing at a CAGR of 16%

The medical diagnostics industry accounts for 5% of the total

health system cost but influences 95% of the remaining cost

Size

Source: Healthcare Federation of India, BioSpectrum, Economic Times

INDIAN MEDICAL DEVICES INDUSTRY: DIGNOSTIC MARKET OVERVIEWPathology

accounts for 58%

of the private sector diagnostic

market

Radiologyaccounts for

42%of the private

sector diagnostic market

Organised diagnostic sector

contributes to 35%

of the market share

IMPORT TRENDS

Import of medical devices in India grew by 24% year-on-year.

Growth in imports is led by diagnostic items, MRI scanners, CT scanners, ultra-

sound machines and ECG apparatus.

30% of imports are from USA

1510

4 3 3 2 1.5 1 0.7

Chin

a

Germ

any

USA

Asia

n co

untr

ies

Italy

Pola

nd UK

Fran

ce

Switz

erla

nd

TOP COUNTRIES EXPORTING DIAGNOSTIC EQUIPMENTS TO INDIA

(USD million)

Imaging machines

In-vitro reagents

Point-of-care testing kits and instruments

Logistic services, e.g. cold storage vehicles

Molecular pathology

Wearable devices and healthcare apps

Opportunities

USD 100 million

estimated market size

99% of market is

dominated by private players

20-30% annual growth rate

Dentist to population ratio

1:10,000 (urban)1:250,000 (rural)

470

1,100

2015 2020 (P)

2015 2020 (P)

MARKET SIZEOF DENTAL

PRODUCTS IN INDIA (USD million)

IMPORT DEPENDENT MARKET60% of dental products are imported

Key countries exporting to India: High end products: EU and USA Low cost alternatives: China and Korea

MARKET TRENDMany multi-national players have seized the opportunities emerging in the Indian dental care industry. Players such as Apollo Group, Wockhardtand Fortis are gradually setting up dental clinics across the country

GROWTH DRIVERS

Increase in insurance coverage Boost in medical tourism Rising health awareness Increasing ageing population Change in lifestyles Increasing per –capita income

KEY SEGMENTS Amalgams and alloys

Prosthetic and aesthetic

Orthodontic supplies

Infection control products

Endodontic supplies

Dental implants

Source: Media releases and T&A Analysis

INDIAN MEDICAL DEVICES INDUSTRY: DENTAL MARKET OVERVIEW

Smaller implants

Patient-facing mobile

apps

Digital platform

integration

Surgical Robotics

3D printing

Artificial intelligence

Home use connected

devices

Less invasive diagnostics

Ancillary services

Source: PwC Health Research Institute Clinician Survey

Remote monitoring solutions

INDIAN MEDICAL DEVICES INDUSTRY: DISRUPTIVE TECHNOLOGIES

Hospital Management System - a workflow-basedICT solution specifically meant for governmenthospitals

e-Hospital@NIC

Program using innovative mobile phone technologyfor community health operation to identify specificareas where children are partially immunized orunimmunized

Intensified Mission Indradhanush

A web-based robust drug procurement systemproviding the real-time status of the availability ofmedical products

e-Aushadhi

Mobile application that records RCH data from allstates and union territories in a central repository totrack and facilitate delivery of antenatal andpostnatal care services

ANMOL

A web-based initiative to connect, digitize and streamline the workflow of blood banks across the

nation

e-Rakt Kosh

Online submission of clinical trial data, monitoringapproved trials for patient safety, and maintaining acomprehensive central database thus speedingapproval decisions

SUGAM

An electronic vaccine intelligence network digitizesvaccine stocks and monitors the temperature of thecold chain through a smartphone application

e-VIN

World’s largest government-funded healthinsurance scheme designed to be digital, cashless,and paperless using IT platforms and data analytics

Ayushman Bharat Yojna

Provides telemedicine services to remote areas byupgrading existing Government healthcare facilities

National Telemedicine Network

INDIAN MEDICAL DEVICES INDUSTRY: IoMT IN PUBLIC SECTOR

Uses machine learning predictive models for visionimpairment and eye disease and helps eliminateavoidable blindness

Microsoft Intelligent Network for Eyecare

A cost-effective, non-invasive, radiation-free breast cancer screening tool using machine-learning algorithms, big data analytics, and thermal image processing for early and accurate detection of breast cancer

Niramai

SMART clinics using multi-parameter monitoring devicesfacilitating multiple diagnostic tests and creating EHRsaccessible remotely through real-time dashboards

e-LAJ

Aids physicians in making personalized clinicaldecisions

IBM Watson for Oncology

Blood bank information system for the bloodsupply chain

Bagmo

Phone-based homecare device to help usersmonitor their health metrics, suggestproactive lifestyle changes

Inito

A service that uses visual intelligence reducinginterhospital transfers and the associatedrisks

e-ICU

INDIAN MEDICAL DEVICES INDUSTRY: IoMT IN PRIVATE SECTOR

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