Introduction to the Indian Medical Device Market

Welcome to the BlueSalt Group’s Blog. The aim is to inform you about the fast-growing Indian medical device market and keep you up-to-date on the latest developments. Here you find a brief overview of the three most important structural and economic factors in this market: the size and diversity of the market, the relatively low spending capacity of customers and healthcare consumers, and finally the need for frugal innovations to bring western-style healthcare to millions more people.

1. India is a large and diverse market

One estimate expects the market for medical devices to grow to seven billion USD by the end of 2016, with foreign manufacturers accounting for up to 70 percent of this total. My next post will cover this topic in greater detail, but for now it suffices to say that the country’s huge, increasingly wealthy and aging population poses immense opportunities and daunting challenges. Anyone looking to sell devices in India must appreciate the country’s linguistic and ethnic diversity. India has 29 states, each with its own set of health policies, and over a dozen major languages are spoken. There are around 50 cities with populations of over a million each and the disparities between the markets in urban, semi-urban and rural areas are stark.

2) Low spending capacity, low rates of insurance

One of the most important things to keep in mind regarding the Indian market for medical devices is that spending capacity is far lower than in Western countries. This is true not only for patients but also for doctors and hospitals. This is due in large part to the fact that for a majority of medical consumers in India, third-party insurance is not a factor. Even major surgeries like stent implants are mostly paid out of pocket, and consequently high-quality private healthcare is out of reach for many.

India vitally needs innovative and affordable medical technology to improve access to western-style healthcare, reach more patients and provide better outcomes. In the world’s second most populous country, the current supply of healthcare services falls woefully short. Particularly for those in rural towns (an estimated 70 percent of the population), the existing health care delivery mechanisms in place are inadequate to meet the ever- growing demand.

3) The need for frugal innovation

In a country like India, where resources are scarce but needs are great, medical technology must be inexpensive, reliable, robust, and easy-to-use. I believe, therefore, that so-called “frugal innovation,” is the way forward. According to Carlos Ghosn, the joint chief of Renault and Nissan, “frugal engineering is achieving more with fewer resources.” Device manufacturers, exporters and distributors need to squeeze costs so they can reach more Indian customers, most of whom must pay all costs out of pocket. This will enable them to exploit economies of scale. Frugal approaches to innovation are particularly critical in the Indian context to make modern care accessible (and affordable) for all.

I hope you’ve enjoyed this first post. As mentioned above, the next post will cover the size of the market in greater detail. Please check back here regularly for updates. If you have any questions, or have an idea for a topic you’d like to see covered here, please contact me at info@bluesaltgroup.com
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