India is now in the limelight for its expertise in the medical devices space. The industry's inherent engineering strengths is being recognized by global majors who are looking to tap the emerging market opportunities to augment growth. This is where Bangalore-based MedVed sets up an advanced facility here, which has designed and developed high quality, reasonable priced implantable medical devices for cardiac rhythm management. The company's 'Stellar' brand for single and dual pacemakers, cardiac leads, pacing system analyzers will now revolutionize the heart surgery management. Dinesh Puri, chairman and managing director, MediVed Innovations Pvt Ltd provides an overview of the opportunities, business potential in the segment in a discussion with Nandita Vijay. Excerpts:
How do you see India emerging as a hub for contract design, manufacture of medical devices?
India is well placed in the outsourced contract design, development and manufacturing space because of its engineering capabilities in a wide spectrum of areas. Typically, there are two market opportunities in contract design and development of medical devices. One is that companies in the US and Europe can offload a whole range of existing medical device products to India to maximize the cost advantage. India has been proving to be a reliable and dependable source for this capability. The second is that global companies can look at India as a hub in the Asian region to undertake contract design, develop, manufacture and package the medical devices.
What according to you are the visible trends in this space?
A visible trend is that all international companies in the wake of the global economic slow down are looking to tap opportunities in the emerging markets. These are the markets of the future. Companies in the West are transforming business models to cater to the needs of the emerging markets which make up 4/5th of the global demand.
In the wake of these opportunities, what are the efforts taken by global cos to make the most of the situations?
The companies have begun to re-device the business strategy primarily because emerging markets are price sensitive. Therefore companies would look at alliances and joint ventures with Indian enterprises in these regions. In the US, the issue is 'performance over price' as against India where it is 'price over utility'. Therefore international companies need to look at the 'design-to-cost' factor to make medical devices available in India. This is where global majors will now have to look at design and manufacturing hubs in Asia and India, in particular, to tap the quality-cost advantage which will help improve gross margins. There is need for innovative thinking and India is now building its capability to be a platform for such prospects.
What are the challenges before medical devices cos to generate business?
The challenge for medical device companies is to raise funds and be able to repay within a realistic time frame. In this business, cycle time is longer. Therefore, both the investor and management have to be patient. There is also the issue of global sourcing of raw materials and dealing with imports because of inconsistent levy of import duty on raw materials which is higher than the finished products. Therefore, we need to be able to raise investments with a realistic time frame and calibrate expectations of time.
Could you tell us how MediVed has grown since its inception two years ago?
MediVed is in the league of the top six world-class medical devices companies. It has the advanced infrastructure and technical competence to offer services at a competitive cost. Our capability covers design, development of electro mechanical diagnostic and therapeutics devices besides implantable devices and active implantable like pacemakers. The company is currently doing five pilot projects for customers in the US. The assignments are in various phases of development. The projects are proving to test the capability in development of complex devices ranging from surgical to dental and diagnostics equipment apart from implantable devices. But, since pilots take a long time to convert into revenues, we are keen to tap the contract business space. By 2011, we hope to garner a turnover of Rs 150-crore which will be generated with contract assignments and the 'Stellar' brand pacemakers. The two opportunities could chip in a 50:50 revenue generation. The business opportunity in medical devices globally is close to $200 billion.
How is MediVed positioned to tap the opportunities?
MediVed has the expertise in medical device engineering, design and prototype. It can provide the proof of concept in the lab study and later scale up manufacture.
We are gearing up to offer our expertise across all segments in medical devices from electrical-electronics-mechanical engineering to software. These include high precision machining of components, sub assemblies to printed circuit boards assembling, sourcing of implantable grade materials and sterile packaging, global sourcing of bio gradable materials which are implantable grade materials steel, noble metals, novel biomaterials like nitinol, polymers, silicones, epoxy of medical grade. This is possible because of our state-of-the-art ISO 13485 compliant in-house multi disciplinary engineering and manufacture infrastructure that includes micro electronics, polymer sciences, bio mechanical, laser welding-hermetic sealing which is supported by 100,000 class clean room and complex device assembly areas. We have the expertise to provide the required regulatory compliance documentation for medical devices manufacturing quality management systems.
What is the future of medical devices industry?
The future holds immense potential for the medical devices industry. This is because of the strong growth of the healthcare space. India can score over China in the medical devices space and grab the contract design and development orders. The country has a sound record in adherence to IPR which is vital for medical devices because it follows English law which is also referred to as the contract law of the Commonwealth countries. International Courts uphold the English law.
There is multi-disciplinary R&D efforts and engineering capability in multiple sciences of electronics, chip design, software mechanical and medical engineering which are complex. The country has already made a mark in pharmaceuticals, development of new chemical entities and clinical research. The time has now come for India to take its place in the medical devices space. This medical device engineering opportunity is bigger than the Information Technology (IT) boom and we need to capitalise.