Indian Medical Electronics Industry
The Medical electronics industry has witnessed double digit growth in recent years and this growth trajectory is expected to continue due to the rising incidence of chronic diseases, increased urbanization and a growing elderly population. In 2010, the Indian medical electronics industry constituted sales of US $1Billion out of an approximately US $2.5Billion medical devices industry market of an overall $50 billion health care market. Although available statistics project a growing and improving healthcare infrastructure in the country, affordability and accessibility barriers impede penetration of medical technology and equipment within vast majority of the population.
The current product affordability of medical technology is a major barrier for the market to be able to achieve its anticipated potential growth. However, prudent innovation methods can reduce manufacturing costs and eventually lower market prices. Additionally, an increased focus and reliance on domestic manufacturing of medical electronics, as opposed to the current dependence on the import market, will also help to improve this overall condition. Products customized and designed to match Indian patient requirement, have the potential to increase market penetration rate in Tier II/III cities. Enablers such as strong management information systems and innovations in telemedicine can allow for medical technology to be scaled to the masses in a cost effective manner.
Enabling adequate access to medical electronics within a socio-economically diverse context such as India is challenging due to the fact that healthcare facilities in Tier-II/III cities and rural India are underdeveloped and do not have adequate infrastructure to adopt the latest technological advancements. While health insurance coverage has been an enabler for enhancing access to care, coverage is limited to those who are covered by the private sector (roughly 5%) or fall within one of the national government sponsored schemes such as RSBY (Rashtriya Swasthya Bima Yojana) or state sponsored initiatives such as Aarogyasri.
Finally, we believe that for medical electronics to create a meaningful impact on the healthcare system, collaboration between key stakeholders including government, industry, healthcare providers, and health insurance companies will be important in order to come up with the right success strategy and improve overall health care access and delivery in the country.
The Federation of Indian Chambers of Commerce and Industry (FICCI) hosted the 3rd International Conference on Medical Electronics with a focus on “Partnering for Access and Affordability” where the way forward in medical technology was discussed. Deloitte, as the knowledge partner for thoughtpaper, has prepared this thought paper to provide a future perspective on the industry in terms of how roles of value chain players will need to evolve in order to overcome challenges and spur the appropriate market drivers to impact growth in the industry.