Bangalore, June 14, 2010: India is expected to lose $225 billion in 10 years due to productivity loss from the increasing non-communicable heart disease, stroke and diabetes, which are expected to double in the 30 year period from 29 percent in 1990 to 57 percent in 2020.

These chilling statistics, says FICCI, poses a huge challenge for the government and the healthcare industry in giving a fillip to the medical device industry and finding radical solutions to the abysmally low hospital beds to population ratio, shortage of doctors and nurses.

According to a FICCI study on ‘Medical Device Industry – Key Link in Healthcare’, medical devices equip healthcare providers with tools to perform their functions effectively and efficiently and are considered to be crucial for the services offered in prevention, diagnosis, treatment and rehabilitation of illness and disease. Every country needs to establish systems for standardizing and regulating them for patient safety and increasing access to quality healthcare.

The majority of the world’s population is denied adequate, safe and reliable access to appropriate medical devices within their health systems. This is evident from the skew in usage patterns where about 50 percent of the world’s population in China, India, Indonesia, Brazil and Pakistan account for only 4.4 percent of global medical device use.

The FICCI study states that healthcare sector is one of the largest and fastest growing sectors in India with an annual turnover of $36.70 billion with 10-12 percent growth rate. About 72 percent of the healthcare sector is dominated by the healthcare services. Medical device and equipments sector contributes only six percent of the total healthcare sector at $2.14 billion and is growing at 15 percent.

The Indian medical device industry is also stifled due to fiscal anomalies. The industry is characterized by over 60 percent imports. Today, the tariff structure is such that the duty on components and raw material is higher than a finished product for devices such as stent and coronary systems. While the budget this year rationalized it for orthopaedic implants much more needs to be done in this area of bringing parity in tariff structure. It has suggested establishment of parity in duty structures for raw materials and imported medical devices, such that duty on imported raw material/ component does not attract higher duty than the finished device. Similarly, for antigens, antibodies that are being used in diagnostic devices are at a higher duty than the complete device, thereby discouraging Indian manufacturing.

Further there is a need to look into extending GST exemptions to critical medical devices with a process of revisiting every year to accommodate technology advancement and changing disease patterns. India’s disease burden as per WHO data in 2002 was 86 percent higher when compared to China and 37 percent higher than Brazil. Globally, it is accepted that preventive healthcare leads to better health at minimal cost. However, this requires significant investment, which will benefit the society in the long run.

Diagnostic equipment, which are key to early detection and timely therapy are key to preventive healthcare. These includes in-vitro diagnostic tests that can detect diseases, conditions, or infections, and can be used in laboratory or at clinics/ patient bedside/home. It involves examination of specimens derived from the human body, for the purpose of evaluating a physiological or pathological state, or to determine safety and compatibility and to monitor therapeutic measures. These kits are small and usually do not require sophisticated working environment. Therefore, they can be widely used in remote areas for screening patients as well as monitoring the progress of therapy. Currently, this sector is also a victim of tariff anomaly, and faces barriers for introduction of new technologies. Also shortage of adequate test and evaluation infrastructure for newer technologies and closed systems are acting as barriers to access for certain In vitro diagnostic medical devices (IVDs).