Are Medical Device Parks Helpful for Indian Innovators?

The government has approved setting up four medical device parks to boost Make in India initiative and produce affordable and high-quality medical equipment. According to news reports, the four parks will be set up in Andhra Pradesh, Telangana, Tamil Nadu and Kerala. Can this help the Indian healthcare sector handle existential challenge- Importing Medical Devices? A HE report.

This is the story of a few health tech startups, their experience with med-tech parks, investors, their life cycle and challenges.

India doesn't have stringent laws about patient data and privacy, which in turn is a gold mine for technology and medical device firms. However, we don't detect many companies offering the right solutions or surviving the Indian market stipulations. Why?

Long Gestation Period?

Take the case of the Indian Institute of Technology Hyderabad. IIT Hyderabad researchers have developed a low-power device that can monitor electrocardiogram (ECG) and alert patients and doctors in real-time about the risk of cardiovascular diseases (CVD).

CVD tops the list of public health concerns compared to other diseases and has almost become the primary cause of human deaths, as per a survey of the World Health Organization (WHO). The leading causes include changings trend in lifestyle, unhealthy eating habits, tobacco usage, low fruit and vegetable intake and lack of physical activity and lot of stress. These factors necessitate developing a personalised CVD monitoring device powered by battery backup and with a very low form factor to achieve unobtrusiveness that works under the emerging cyber-physical system setup.

This area was researched by a team comprising Vemishetty Naresh. PhD. Research Scholar, Advanced Embedded Systems and IC Design Laboratory, Department of Electrical Engineering, IIT Hyderabad and Dr Amit Acharyya, Associate Professor, Department of Electrical Engineering, IIT Hyderabad.

"India needs affordable and indigenous devices. That was the vision behind developing this tiny non-obtrusive cardiovascular healthcare assistant. The ratio of doctors compared to patients is below average; technology is the solution for healthcare. That's why we developed this intelligent device. It's not just an ECG device. Our algorithm recreates the diagnosis of the doctor based on ECG data points," says Dr Amit Acharyya.

What does he think about government initiatives like Make-in-India? "Sustainability is the biggest problem in the startup world. It is nice to see that the government has set up these initiatives. But sustainability is the biggest issue," he adds. Interestingly, the government has recently announced setting up of more medical device parks. Will it help Indian companies?

MTaI Chairman and Director General Pavan Choudary points out that Andhra Pradesh Medical Device Zone (AMTZ) is coming up very well and if successful, could become a torchbearer for other Medtech parks. "Setting up of Medtech parks should surely increase the production of medical devices in India, but the type of parks needed and their locations should be decided by what category of medical devices are we looking at producing, what type of investors we wish to attract and whether the regulatory entry barriers are commensurate with our ambitions. Medtech parks alone won't lead to an increase in FDI. FDI fell from $439 million in 2016 to $66 million in 2018. Jan-June 2019 figure of $108 million could be signalling a recovery. Let's ensure through well thought out policies and incentives that this time the growth endures." Many innovators think that government doesn't understand the needs of med-tech startups.

Innovation is a slow process

Shyam Vasudevarao, the cofounder of several healthcare startups, points out that there is a mismatch in understanding need from the government side. "

Medical device development requires time and is an interdisciplinary field. Access to these clinical partners, investors is crucial for a medical device company. When I was with Forus Healthcare, I got five products out in around five years. This was taking three years from start to getting the product into the market because it was a non-invasive device. In the case of other companies like Renalyx, dialysis products, it takes six years to get the necessary certifications to get into the market. Indian investors don't have that appetite at all. Most of them don't want to fund a high-risk business. Most of the guys investing in m-commerce and e-commerce are also investing in the healthcare industry. In e-commerce, they can give the product in two years, and five years, they can be operationally sustainable. In Boston or other countries, most of the investors don't trouble startups for seven years. This is missing in India. I am one of the staunch advocates of Andhra MedTech Zone. I have two companies there, and we also do some manufacturing there. The dialysis machine is costly. However, in AMTZ, I couldn't find a diverse ecosystem. I was also not able to get any cost advantage because the labour was not available there. Having a Medtech park to help people with a 3D printing isn't going to help that much.

Quality Certification is Key

"While India aims to be a Medtech innovation hub, Indian doctors don't unquestionably accept devices made-in-India. There is a lot of resistance and a more extended gestation period for Indian medical devices. There have been numerous instances of Indian products not meeting the quality norms and the poor after-sales service experience in the past. For any Medtech zone to succeed, they should have a global strategy. For an Indian medical device startup to be taken seriously, they should get a US-FDA approval or a CE marking. It is an expensive and time-consuming affair but is worth the effort with the right Global GTM strategy and execution plan in place," says Dr Karthik Anantharaman, Director, E-Pharmacy, Medlife International Private Limited.

What Needs to Be Done

Dr GSK Velu, Chairman and MD of Trivitron seconds his views. "While setting up medical devices park is a welcome move, but this alone is not going to change the ecosystem of highly import-dependent medical devices segment. R&D subsidies, Government, Academia & Industry collaboration, tax incentives for domestic MSME manufacturers and preference for locally manufactured products in government purchases are the key steps required to overcome the very high import dependency of this sector. Hence initiatives in isolation are not going to make a big change to the sector," concludes Velu.

Indian healthcare and policymakers need to accept that it has an import puzzle and take responsibility for dealing with it. Successful countries do not solely rely on market forces. They supplement market forces with the heavy hand of state-driven industrial policy. Indian healthcare needs to create conditions for small companies to thrive, build a manufacturing base and nurture both small companies as well as export-oriented manufacturing with financial institutions tightly controlled by the government.