Techno-Med
A Special Feature on Medical Equipment Technology

Rise of the equipment market

Growing at a rate of nearly 20 per cent each year, the medical equipment market holds a huge stake in the healthcare pie at Rs 1500 crore. According to industry estimates there are over 3500 manufacturers in India. Vijaya K takes a look at the structure of the medical equipment market and presents a functional overview.

Market

As the Association of British Healthcare Industries report on Indian healthcare industry puts, it: Foreign manufacturers with extensive service networks (GE, Phillips, Hitachi, Siemens) dominate the high end of the equipment market. Indian manufacturers produce medium-tech equipment, though local products maintain the stigma of unreliability. The low end of the market (consumables and disposable equipment) is dominated by a fragmented group of local manufacturers.

Samir Gupta, director of the Bangalore based Pulsatum Healthcare Pvt Ltd, says that medical equipment industry in India can be classified as import and sales, which forms a major part of the market in India, CKD import, which is basically a handful of multinationals, assembly & sales, basically low-technology equipment sales and manufacturing indigenously & sales.

K Y Ashok Murthy, director of Moola Technologies, Bangalore agrees. He explains that the medical equipment industry is heterogeneous, comprising sub-markets, each experiencing different growths. Imported equipment are sold by authorised distributors who look after sales and service aspects. Next come the manufacturers who can be further sub-divided into Indian operations of MNCs (for e.g Siemens, GE) and local companies (the likes of L&T, BPL etc). Moola Technologies is involved in the manufacture and marketing of monitors like pulse oximeters and compressors for ventilators and represents some foreign manufacturers for products like ventilators, surgical diathermies, operation tables etc.

Most of the local manufacturers are in small scale sectors with a limited market reach. Apart from 4-5 major companies, no major company has a distribution or support network in India, with most of them dependent on local dealers/ suppliers for furthering their business interest.

Actual players

Gupta says that it is extremely difficult to estimate the actual size of the industry because maximum business in India, especially North India, relies on grey market and majority of the products are imported. The major problems that we face are from the grey markets - firstly blood sugar monitors which are officially marketed for more than Rs 4000 are sold in grey markets at Rs 1400-1600. Cheaper imports and dumping of materials in India stifle the local industry, he adds. “To add to this is high rates of taxes — we are still paying 16 per cent excise duty plus 4 CST and 3-4% octroi in most states + 10 LST (15% in Mumbai!!) which totals almost to 35 per cent.”

Growth

With liberalisation, more and more sophisticated diagnostic/ monitoring equipment is coming to India. “This trend has been welcomed by the medical fraternity which has found encouraging results to validate their clinical findings,” says A V Bhat, COO, Healthcare Business group of BPL Ltd, Bangalore. Yet the growth of medical equipment is constrained by the limited affordability of the patient to pay for the treatment requiring sophisticated equipment. BPL’s current product portfolio consists of ECG machines (Single channel and Multi Channel), Bedside Monitors (Single Channel and Multi Channel), DC Defibrillators, Oxygen Concentrators, Nebulisers, Central Nursing Stations and Portable Ultra Sound Scanners. It plans to add complementing products in the field of cardiology and diversify into other specialities like anaesthesia, pediatrics and gynaecology.

Customer satisfaction

Over the past several years the medical equipment industry in India has exhibited solid growth in its sales, employee base, reputation and most importantly the number of satisfied customers. The industry works on the primary operating principle of understanding, anticipating and meeting the customers needs. Says Jawahar R Vasan, chairman of Medi Instruments of Bangalore-based Surgiments group, “Quality, service and innovation play an increasingly important role in the medical equipment industry today. More than ever before the surgical communities demand for quality products which is measured against rigorous standards. Thus there is a very good market for foreign products.”

Medi Instruments manufactures operation tables, operating lamps, autoclaves, suction apparatus, s s furniture and surgical instruments. The company has also introduced and produced many new products for various surgeries like Titanium alloy instruments for micro surgery.

Benchmarking

Experts opine that there is a need for a legislation for benchmarking equipment, specifying guidelines and requirement of sound infrastructure to manufacture quality equipment. Says Vikramjit Singh, country manager, Criticare Systems Inc, “Local dealers are not particular about CE mark nor are the hospitals.” Overseas, there are different classes of medical equipment and guidelines for each class. Here the manufacturers have to see that they voluntarily get at least the CE mark, he adds.

The demand for quality healthcare and insurance has put pressure on the providers to deliver the best. But to meet these needs, the industry has to be strengthened to perform upto the level of excellence and satisfaction.

Future

With smaller markets like district and taluka hospitals and Primary Health Centres lying hugely untapped, there definitely is promise for the equipment companies. And may be the manufacturers must take ABHI’s suggestion: Opportunities exist for those who can supply hospitals with a high quality, integrated range of products, supported by an extensive service network.