December 2, 2010 Pradeep Chakraborty
The India Semiconductor Association (ISA) has released a sector report on the opportunities in the Indian medical electronics field, titled: “Current status and potential for medical electronics in India”, 2010, at the Narayana Hrudayalaya campus in Bangalore.
The Indian healthcare market (FY ’09) has been valued at Rs. 300,000 crores ($63 billion). Of this, healthcare delivery makes up 72 percent, pharmaceutical industry 20 percent, health insurance 5 percent, medical equipment 1.4 percent, medical consumables 1.1 percent, and medical IT 0.2 percent, respectively.
Medical electronics has been valued at Rs. 3,850 crores ($820 million) of the overall Indian healthcare market of Rs. 300,000 crores. The Indian medical equipment market is estimated to grow at around 17 percent CAGR over the next five years and reach about Rs. 9,735 crores ($2.075 billion).
As per the ISA report, the Indian healthcare industry currently contributes to 5.6 percent of GDP, which is estimated to increase to 8-8.5 percent in FY 13.
The domestic market for medical equipment currently stands at Rs. 3,850 crores ($820 million). Annually, medical equipment worth Rs. 2,450 crores ($520 million) is manufactured in India, out of which Rs. 350 crore ($75 million) is exported.
Growth of the medical equipment market is directly proportionate to growth of healthcare delivery, which was Rs. 216,000 crores ($45.36 billion) in 2009 Siemens, Wipro GE and Philips are leaders in the space with 18 percent, 17 percent and 10 percent share, respectively. However, 45 percent of the market is addressed by smaller, niche domestic players.
The report was released by Dr. Devi Prasad Shetty, CMD, Narayana Hrudayalaya, in the presence of Dr. Bobby Mitra, ISA chairman, Poornima Shenoy, ISA president and Vivek Sharma, convener of the ISA Medical Electronics Segment.
Need to bring healthcare to everyone!
Delivering the keynote, Dr. Devi Prasad Shetty said: “Converting atoms into bytes is very important as the knowledge or software that you have can put you in a position of giving those to others for use. In this world, you can easily give out knowledge snd software to others, without losing it, ever.
“We are the TB capital of the world. There are costs involved in treating TB patients. One can go for a digital x-ray machine — a one-time investment. You can virtually scan to whole country for free!”
He added that Indians have developed a wrong notion of what we are and where we are. “We all feel that India is boomimg and in good shape. The reality is — we are a poor country. We are still an agro-based economy – where farmers, especially, are dependent on rains.”
According to him, only 8 percent of the world’s population — forget about India — can afford to have operation of the heart, brain, kidney or joint. ”I’m talking about the serious procedures on human bodies.”
When you talk of a pessimistic picture of healthcare — well, it is the second largest industry in the world, the first being agro. It is a $2.5 trillion global industry. However, even after pumping in so much money, half of the American population seems to have no access to healthcare. The reason: the world has a very poor healthcare delivery quality index.
“There is a need to bring healthcare to eveyone. The technology should be ubiquitous, and made available to all. Technology needs to take over, otherwise, you can never bring down the cost of healthcare,” he said.
Dr. Shetty highlighted Yeshasvini – a micro-finance insurance program for co-operative farmers healthcare scheme launched eight years ago. Andhra Pradesh has launched a similar program. Now, Tamil Nadu is also launching a similar, low-cost insurance program.
He added: “Going forward, India will be the first country in the world to disassociate healthcare with affluence. We will have millions of people in the slums, but when they are unwell, they can have access to high tech healthcare with dignity.”
Policy makers seem to be calculating that people work till 60 years of age, and pass away by the time they reach 65 years. Moving forward, people are going to celebrate 95 years. Where is the money to manage those additional years? The western countries are in bad shape as they either do not produce enough babies or two, people live longer. The current money spent on healthcare has to change.
After US, India is said to be the no. 2 country for USFDS drug manufacturing units. Dr. Shetty said: “The 21st century will be driven by the healthcare industry, which will be the main driver of the global economy.
“Despite the recessions, over the last five years, the only industry that created jobs in the US was the healthcare industry. As this industry matures, it will need more and more workforce.”
He added that an industry challenge would be to equip the new hospitals coming up. “Unless there is a different way of making medical equipment come to life, the high costs will remain. Is there something that the industry can do to make expensive machines in a different way, so that their prices come down?
“Look at the healthcare industry and its requirements. It is a very exciting industry. We should try and make efforts to bring healthcare to the doorstep of the common man.”
Need to grab huge opportunities ahead!
Earlier, Dr. Biswadip (Bobby) Mitra, president and managing director, Texas Instruments India, and chairman ISA, said that India needs to improve on the quality and acessibility of healthcare that is available, especially to the rural masses.
There is a need to increase the electronics content in developing and producing medical equipment. Semiconductors is at the core of all of this — which can make it all happen.
He added: “For instance, imaging is a major part of medical electronic devices. These devices should not consume too much power – it has to be ultra, low or no power. This can be facilitated by semiconductors.
“Narayana Hrudayalaya is the perhaps, the best place in the world for telemedicine. The challenge is: how can we make the technology behind telemedicine even better so that more of the rural areas can benefit.” He pointed to the data in the ISA report, which focuses on the potential regarding the growth of medical electronics industry in India.
Vivek Sharma, regional VP- Greater China and South Asia-India Operations, and director, India Design Center, STMicroelectronics,and ISA convener, Medical Electronics Segment, noted: “As a group, we developed a strategy with three dimensions. We call it A3 (A Cube), which focuses on affordability, accessibility and awareness.”
Commenting on the Indian healthcare industry, he added: “Estimated at $63 billion, India’s healthcare expenditure represents only about 1-1.5 percent of the total global healthcare bill. With approximately 17 percent of the world’s population living in India, there is a huge opportunity to improve peoples’ lives and grow businesses.”
He said that there were over 8 lakh general physicians, dispensaries, etc., in India, who would be able to reach out to the people living in remote and rural areas.
Healthcare delivery has been divided into primary, secondary and tertiary healthcare, based on the types of services offered. The ISA report has also divided the medical equipment market (FY’09) into three segments — imaging equipment — used largely in secondary and tertiary healthcare; therapeutic and patent monitoring systems — used in primary, secondary and tertiary healthcare; and homecare/handheld equipment, which is in a nascent stage with high growth potential.
Sharma added: “In India, the consumption of homecare and handheld medical devices is only 8 percent, Hence, there are a lot of opportunities in this area. The challenges are: how can we develop the ecosystem, which can unleash this potential, and also, how can we develop the necessary education that is required to make all of this happen.”
I will try and present a brief on the ISA study itself in a separate report, time permitting.
By the way, ISA, please consider having a better choice of venue — perhaps, within the city limits. While it was really a great campus, Narayana Hrudayalaya was simply too far!