Lead Story. Making it a walk in park for medical device-makers

For Maruthachala Mandiram P, a Director with Srushty, a start-up electrical medical equipment maker, procurement of raw material and setting up infrastructure are key challenges. Building infrastructure is capital-intensive and procuring raw materials is difficult, says Mandiram.

But with States such as Andhra Pradesh, Maharashtra and Gujarat taking up initiatives to develop medical technology parks, Mandiram is hopeful that it will encourage local manufacturing and reduce the country’s dependence on imports. The proposed parks with in-house manufacturing units and facility for consolidated raw material procurement will help reduce cost, he says.

Siraj Dhanani, Founder and Chief Executive with InnAccel Acceleration Services, says the park eco-system will help small entrepreneurs tap into the expertise of larger companies. InnAccel is a three-year-old medical technology start-up making products like NoXeno, a simple mechanical device to help physicians remove foreign bodies in the nose, and others to support ENT (ear, nose and throat) and nephrology (kidney-related) treatment.

The big picture is for different parks to complement each other. So, while Visakhapatnam will focus on electrical devices (where 90 per cent is import dependant), Maharashtra will have a cluster for production of consumables, orthopaedic implants and surgical instruments, and Gujarat will concentrate on disposables.

Work on construction of the park in Visakhapatnam will begin in April, while those in Maharashtra and Gujarat are still in the planning stage. The park coming up in Nagpur, Maharashtra has the basic infrastructure like land and connectivity in place and is in the last stages of finalising details. Sanjay Kohlapurkar, Officer on Special Duty for the project, said the park will be developed on a Public Private Partnership model.

In Gujarat, a previously stalled project proposed by the Department of Pharmaceuticals has been revived. Mohammed Ameel, Consultant, National Health Systems Resource Centre, said there are plans to leverage Gujarat’s National Institute of Pharmaceutical Education And Research (NIPER) for research and industry collaboration.

At the proposed parks, companies will have access to quality control units, import and export facilitation centres, regulatory offices and engineering services. Low cost rentals and revenue-support services for companies are also being considered, says Rajiv Nath with the Association of Indian Medical Devices Industry.

There would be tie-ups with medical colleges as well to help entrepreneurs as this industry segment requires much research and development (R&D) effort, he adds. In the case of Visakhapatnam, two medical colleges in the vicinity are keen on partnering with industry and are offering facilities for R&D. “The objective is to bridge the gap between academia and industry.”

Medical devices account for about ₹30,000 crore, with over 80 per cent import dependency, which becomes even higher in high-end electronic medical devices. And this increased cost on equipment gets passed onto the end consumer, a patient in this case. According to Ameel, installation of a medical technology park could increase domestic production up to ₹10,000 crore.

Jithendra Kumar Sharma, Senior Consultant and Director, World Health Organisation Collaborating Centre for Priority Medical Devices and Health Technology Policy, said a park with good in-house scientific facilities would help manufacturers reduce manufacturing costs by 40-50 per cent. And since they are well-connected by air, rail, ports and roads, they will help reduce logistics cost as well, he added.

However, one of the biggest challenges is in terms of policy, he points out. Reduction in the import duty for raw materials will encourage more indigenous manufacturers. “But there is no preferential purchase policy that will assure manufacturers (of demand). Unless there is a policy in place, executing the objective will still be a challenge,” he added.

It is also critical to address gaps in the medical manufacturing ecosystem like development of a regulatory framework, separate from pharmaceuticals, says Varun Khanna, Managing Director, Becton Dickinson India and South Asia, Chairman of Advanced Medical Technology Association.

Though there are teething problems for the medical technology parks, a good start has been made by the three States. And whether more States will jump into the fray would depend on how well the existing plans for medical technology parks take-off.

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