MedAchievers Ivy League Volume 1 - Page 34

MED-TECH COUNTRY STRATEGY : AN INSIGHT Med-Tech in India is evolving. As we join hands to understand and address the different elements of the sector, we spoke to Mr. Probir Das, Managing Director, Terumo India and Chairman of Medical Devices Forum, FICCI, who lucidly brought out the challenges and the way forward to leap-frog as a Med-Tech major in the global map. THE BIG IDEA: Development of Med-Tech strategy depends on multitude of factors, such as: the level at which strategy is being addressed (at an enterprise level); types of devices being considered, the organizational life cycle in which the strategy is being looked at and the intent of the strategy (start-up or scale-up). BUSINESS MODEL: At a country level strategy, the connect conjunction of India is always China! However, the per capita consumption of medical devices in China is approx $150 USD, which is similar to the UK; but that of India is $3 USD per capita, worse than some of the Sub-Saharan countries. Therefore, as we talk of making Med-Tech environment attractive to the global players, we must scale up our currently very low consumption patterns. Meaning, stand-alone increase in consumption is not possible. Overall strengthening of the healthcare service delivery system is essential for Med-tech growth in India. This health system strengthening model is an approach to the 'consumption driven' growth model of the med-tech sector. The other approach is the manufacturing or export driven business model, as successfully demonstrated by Ireland. Ireland with a meagre 8mn population is one of the largest manufacturers and exporters of Med-Tech to the world. As against the earlier consumption led strategy, this is a 'competition led' strategy that encourages manufacturing to support the world's requirement. In order to create an ecosystem to encourage growth of clusters of manufacturing, Ireland has retained its corporate taxation rates as one of the lowest in the world, along with forming investor friendly infrastructure, the combination of which facilitated countries globally to re-locate themselves to Ireland. This can be a pure business model of "Make in India for the World", with limited local social implications, but strategically looking at quickly attracting MNCs. It's important to understand why I suggest a focus on MNCs. Sixty percent of the Med-Tech market share globally is vested with about 40 top companies. Why it is so? Unlike many others, Med-tech is a complicated industry that requires wide knowledge across engineering and medical sciences, retain much of the residual know-how and high level of domain expertise/ depth of knowledge. Therefore, if we were to attract even 10-15 of these top rms to partner with India, to make India as their manufacturing hubs, there's a need to evaluate what kind of benets can attract such entities—tax holidays, export freedoms, clustered infrastructure, etc.... Pure manufacturing apart, the successful ecosystem led business model of Med-Tech thrives on what I call the Med Tech DNA Trinity: 1. Steady supply of high quality engineers, which India has. 2. Availability of strong academic institutions in medicine to support unmet need identication, and testing and validating research ideas. 3. Availability of high quality research institutes, such as the Stanfords and the MITs of the world to nurture innovation. Ideas ltered in the research institutes can be tested in the medical institutions for their efcacy and manufactured later by the engineers. While, India has engineering skills, it seriously lacks in access to academic and research institutes. CHAMBER OF SECRETS: The demand driven model to wait for increased demand to trigger increased consumption is not only a rudimentary model, but is also an untenable model, since it will need medical skills to scale up signicantly in India, and this will take time. Therefore, the manufacturing model to become the global supplier of the med-tech to the world is a better model. However, unlike other manufacturing units, which are run-of-the-mill productions, needing multiple plants to full the d e m a n d s o f c o n s u m e r s , M e d - Te c h manufacturing is ever evolving. Manufacturing here is essentially fed with Innovation, hence smaller plant sizes with limited manufacturing sites. This in turn needs engineering science interacting freely with medical science, end-toend incubators bridging across the current mistrust between stakeholders, who today unfortunately operate in water tight compartments. Thus, "Working together to Innovate is the DNA for the growth of MedTech". KEY SUCCESS FACTOR: On the demand side the success of manufacturing model requires skilled manpower, which takes time, especially when there's a serious shortage of skilled medical / clinical human resource. 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