1. How do you see the major trends that you witnessed during Covid19 in your sector pan out in 2021?
In India’s fight against COVID-19 crisis, the Indian medical device industry relentlessly worked at the forefront to combat the crisis and was in regular and close consultation with the government assuring full support to the spirited fight against the COVID-19 crisis. Post the Union Budget 2021, it is now clear that Healthcare, Pharma and MedTech will be the next sunshine industries. Already huge efforts are being put in to increase medical device manufacturing capacity and the efforts are reaching beyond India too. Government hospitals and Tier-I hospitals will take time to rebound as most of them are utilized to take care of COVID patients. However, the Tier II and Tier III market will bounce back faster since we will see a lot of people avoiding travelling to Metro cities to get treatment.
2. Where do you see the sector going ahead in 2021 after the announcements made in the Union Budget?
As expected in the Union Budget 2021-22, health and infrastructure both occupied prominence with spending directed towards healing a COVID-19 hit economy. With a strong thrust on the 6 pillars of growth, the budget 2021-22 strikes a balance, stimulates growth, employment, and economic development. In the healthcare space, the MedTech industry welcomes the government’s allocation of Rs 1.97 lakh crore over the next 5 years under the PLI scheme which will surely boost confidence of domestic manufacturers. Further, through the Rs. 64,180 crore ‘PM Atmanirbhar Swasthya Yojna’ coupled with an allocation of Rs. 35,000 crore for COVID-19 vaccines and a focus on health labs and infrastructure in rural and urban wellness centres, affordable healthcare that focuses on new and emerging diseases and addresses health gaps in the country will get a major impetus.
However, looking ahead, the sector will have a positive growth. Investments may come from the third quarter of 2021. In the first two quarters, companies will be conservative for fresh investments.
Never-the-less, I personally feel that the Indian medical devices sector is now poised to grow more robustly starting from the year 2021. The world, along with India, has seen the danger of relying on only a few countries for critical supplies. India has already started promoting itself as an alternative manufacturing destination. Like SMT which has achieved a marquee position today in over 75 countries, lots of companies will emerge out of the current crisis with much stronger customer and supplier relationships, which will put India in a good position for the future.
3. What potential do you see in the sector for job creation in the coming period?
The COVID-19 outbreak has managed to teach us the importance of local manufacturing, the domestic market and local supply chains. There is a colossal need to have massive, trained manpower and staff to efficiently handle the entire new phenomenon. Right from production and manufacturing to operating instruments, R&D, to even supply chain and logistics, there is a huge need that is envisaged. I am positive that by the second or third quarter the job situation will get a boost. SMT itself is now scaling its manpower requirement not only for the existing operations we have, but also for upcoming Stent manufacturing unit that will be Asia’s largest in the coming years.
4. What could be your strategy to boost aggregate demand in the sector going ahead into 2021?
The response to the pandemic offers an opportunity to bring about structural changes in India’s health policy and regulations and reduce India’s dependence on imports of medical devices which is currently over 75 per cent. To keep pace with demands of today and also beyond 2021, the need is to re-imagine the paradigm of recognising the fact that that medical devices are engineered products in healthcare and need to be out of the ambit of pharma. If there is a clarity in this aspect, then we can connect the dots and integrate health care pathways, develop meaningful health technologies at scale, and deliver the tremendous potential to improve patient care. Obviously strong political will and decisive administrative action will help the country build a future-ready, resilient and competitive MedTech industry in India.
A lot of growth will depend on the government’s spending on healthcare and making timely and faster payments towards reimbursement accounts. Further, the need is to expand the medical device market for domestic manufacturers and position India to be a big consumption market with sufficient average sale prices, and better procedure prices for Ayushman Bharat and other schemes. At SMT, our strategy will focus on the export sector and expanding the portfolio of products we have.
5. India being the world’s third largest startup hub, how do you see the startup space in your sector for the coming period?
Startups will thrive in India when there is a large market to play. I am sure that with conducive policies, enough sops and subsidies that have been offered, and the technology available, startups will surely have their own ecosphere, and will be able to work on a wide variety of healthcare solutions, that will be promising medical device disruptions. As an example, before the pandemic, there were only a handful of companies that were producing enough PPE kits, RT-PCR kits, or for that matter smaller instruments and gadgets used in healthcare. Today we have them all. It is encouraging to see startups grow in a country like us.
6. India being the world’s third largest startup hub, how do you see the startup space in your sector for the coming period?
The COVID-19 pandemic has presented a unique opportunity to India to emerge as the new manufacturing hub of the world. Along with the challenges, it is expected that the current scenario coupled with the government’s vision towards healthcare will open up a plethora of opportunities giving way to a transformed healthcare delivery system including newer care delivery models, enhanced use of digital tools and other technologies, greater focus on preventive and primary care along with point of care and home based care, restructured facilities and operating models, and most importantly, through various schemes like PLI, IBC, and expanding footprints in R&D, India is poised to become a lucrative destination for foreign investors.
7. Your take on how sector specific reforms (IBC, PLI, Bilateral Netting etc.) by the government helped the sector thrive and be resilient during the Covid19 period?
The government has announced several initiatives and policy measures to boost the medical devices and pharma sector to accelerate growth. These schemes are no doubt planned well in order to foster innovation growth and expansion, but everything depends on how the government expands the market, speeds up its repayment cycle, and adopts domestic innovation within key accounts. For example, the PLI scheme for medical devices will help meet the objective of product diversification and production of innovative and high value medical devices in India. This will make India a major player and manufacturer, and also help in reducing the huge import dependency that we have in the MedTech sector. Other schemes will also have a ripple effect, and I am sure that these initiatives have the potential to contribute significantly to achieving higher objective of affordable healthcare in the country and globally on a sustained basis.
8. What is your analysis and opinion of the Union Budget, as announced on February 1, 2021 for your sector? (Mandatory to answer)
Given the constraints due to the pandemic, the Union Budget 2021 is commendable. The healthcare sector received a major ‘jab’ through an allocation of Rs 2.23 lakh Crore, a 137% increase over the previous year towards healthcare and wellness. Further, the ‘PM Atmanirbhar Swasthya Yojna,’ Digital Health, Nutrition Mission and a dedicated allocation of Rs. 35000 crore for vaccines will create an ecosystem of safeguarding citizens and providing affordable healthcare that will now focus on new and emerging diseases, and address healthcare gaps in the country. The PLI scheme allocation of Rs 1.97 lakh crore over the next 5 years will surely attract global and domestic manufacturers to partner and echo the government’s ‘Atmanirbhar Bharat’ call, leading to a strong economic revival.
