Vishwaprasad Alva, Managing Director of Skanray Technologies, speaks on how early recognition of the MedTech sector had stifled the industry's growth, skewed outlook, outdated regulations and more.
Published Sep 09, 2024 | 12:00 PM ⚊ Updated Sep 09, 2024 | 5:57 PM
MedTech is an electromechanical sector. It involves high-tech electrical and electronics manufacturing, which is different from the pharmaceutical industry.
The Union Government’s Department of Pharmaceuticals released the Uniform Code for Marketing Practices in Medical Devices (UCMPMD), 2024, to curb unethical practices in the medical devices sector.
It applies to every manufacturer and producer of medical equipment and technology. However, MedTech entrepreneurs are a dissatisfied lot.
Both the guidelines and the inclusion of the MedTech sector under the Department of Pharmaceuticals, which operates under the Ministry of Chemicals and Fertilisers, need to be reviewed from the ground up.
Speaking to South First, Vishwaprasad Alva, Managing Director of Skanray Technologies and former Chairperson of the Medical Devices Committee at FICCI, said, any reference to MedTech needs to be specific. Electromechanical medical devices, such as CT scanners, MRI machines, PET-CT, patient monitoring systems, diagnostic imaging systems, ventilators, anesthesia machines, and heart-lung machines, form one category.
These devices involve a vast range of technologies encompassing electrical, mechanical, software, hardware, embedded systems, image processing, material science, and more.
Essentially, the entire spectrum of advanced healthcare technology should be separated from the pharma group. Then come consumables and implants like stents and accessories, which can be part of the pharma sector since they fall under similar manufacturing, testing, and clinical requirements.
“The government’s biggest mistake was to club the pharmaceutical industry and MedTech in a single category under one ministry. It’s like categorising tractors, drones, and aeroplanes used for agricultural spraying as a single unit under the agriculture ministry just because they are used in agriculture,” Alva pointed out.
Pharma is about molecules, API, formulations, long clinical trials, short expiry dates, storage restrictions etc and is highly process-oriented. It’s a $130–140 billion export industry that has grown independently. The government had little to do with its success,” he explained.
“Like the IT industry, pharma was built by entrepreneurs, not through any planning or visionary politicians. The government realised and intervened once the sector became large, assuming they were responsible for its growth, and started regulating it, which is a huge mistake,” Alva opined.
He added that the overregulation hindered the growth. The sector would have expanded much faster if the government had not imposed stringent controls.
Alva said the government suddenly realised it lacked the necessary core medical technology during the Covid-19 pandemic. In response, it identified the MedTech sector as a sunrise industry and began focusing on it. However, by placing it under the pharmaceutical sector, the government caused significant harm.
“All policies, laws, and procedures governing MedTech now stem from the pharmaceutical industry — an industry where practices like taking people to exhibitions, conferences, and offering bribes are common. MedTech has not been as affected by these practices. But this overregulation is damaging the MedTech sector,” Alva said. “Moreover, this is not the priority. First, develop the industry, then regulate it. Here, we are regulating first and debating how to create the sector.”
Since the government started promoting “Atma Nirbhar Bharat” and “Make in India”, growth has either stagnated or declined in many sectors, including MedTech, despite vast opportunities.
“Instead of growth, we’ve seen a surge in imports. This highlights the core issues facing the MedTech industry,” he added.
“A key challenge is research and development (R&D),” he said, referring to the electromechanical aspect of the industry.
This is a niche sector, unlike pharma. There are lakhs of profitable pharma companies worldwide, including in India. But MedTech is concentrated in just a few countries — primarily the USA, Japan, China, Germany, and the Netherlands, with some presence in Korea. India is still a small player,” Alva pointed out.
Unfortunately, the government has recognised the sector too early before it could grow.
“If it had left us alone with just a fair market access and transparent tendering process, we could have grown into a $50 billion industry in 10 years. The government could have then regulated and taxed us as needed once the sector had a critical mass. But by identifying us as a ‘sunrise’ industry too soon, it put the sector under heavy scrutiny and failure.”
Previous governments did nothing to help or regulate and all kinds of cheap goods flooded the market. This government took the issue of safety, and certifications seriously and did nothing to help the sector with its pain points of capital, technology and captive market.
To build a CT scanner, MRI machine, anesthesia machine, or X-ray machine, around 10,000 to 50,000 components are assembled and tested for safety across numerous parameters. While pharma has its complexities with formulations and field trials, these are entirely different sectors.
“If the government wants to support the MedTech sector, it needs to address the core issues that remain unresolved. I served as the FICCI chairperson for two years and attended at least 10 meetings with the Government of India, including the pharma ministry, the minister, and the secretary. While they acknowledged the importance of these issues, no real action was taken,” Alva explained.
Instead, the government continued drafting vague policy papers, regulating prices, and involving drug regulators and legal metrology, which focuses on the weight of equipment and labels, as in the pharma sector, rather than on specifications, safety, and performance. Previously, there was only one regulatory body, but now there are 27.
This increase in regulatory bodies has led to more corruption, especially at the lower levels. At the local city, district, state, and central levels, a typical industry faces about 150 bodies that can summon, stop, or harass, yet not a single body works for its welfare.
Terming the current situation “very concerning,” he added that various departments have been passing the buck among themselves without any concrete outcome.
“If you talk to pharma, they’ll send you to health. Health will send you to the states. Nobody takes ownership to resolve this decades-old issue. MedTech would be better off under an independent body if it is truly a sunrise sector, and it should be separated from pharma. MeitY is the closest department that can help if creating a new body is difficult.”
He further stated that laws like the Pre-Conception and Pre-Natal Diagnostic Techniques (PCPNDT) Act of 1994 have hindered the development of the MedTech industry, as the Act regulates ultrasound machines due to concerns over female foeticide.
“This 30-year-old law is now irrelevant. Modern technology can prevent female foeticide while allowing the use of ultrasound in all the new diagnostic and treatment domains. Ultrasound is no longer just for maternal care; it has expanded into various areas of medicine. But in India, we can’t use it freely because of this outdated law,” he said.
Alva noted that despite making several representations, “nothing meaningful has come out of it—just policy statements and agreements.”
In MedTech, R&D is crucial for the sector. While the government has started offering production-linked incentives (PLI), it should also provide R&D-linked incentives,” he said.
“Indian companies need the support to acquire technology and enough breathing room for these technologies to evolve. The government has now earmarked R&D funds, but the disbursement and effectiveness will only be seen once the scheme is rolled out.”
Claiming to be a staunch supporter of the government for many reasons, Alva expressed his frustration.
“Without direct intervention from the PMO or Shri Narendra Modi himself, ministries don’t communicate with each other or proactively resolve issues. When everything falls under a single ministry, they are receptive and quick to act. This government is honest at the ministerial and secretarial levels, and corruption is almost non-existent. However, by over-regulating the industry, the lower-level staff have become more corrupt due to the increased opportunities for exploitation,” Alva said.
There are several other issues plaguing the industry. “Public procurement and government tenders are being manipulated at the pre-tender level, which is a major deterrent for MedTech startups and compliant Indian or MNC MedTech companies,” he complained. This encourages unscrupulous lobbies and discourages compliance.
Alva pointed out that while India has allowed the unchecked dumping of low-cost Chinese products, Indian companies take years to gain access to the Chinese market.
“China, Brazil, Korea, and Japan enjoy unfair advantages in the Indian market that Indian products can’t get in theirs,” he said.
He suggested that the law of reciprocity could be applied but acknowledged that past MFN (Most Favoured Nation) agreements or other unknown reasons might prevent this. He also noted that state governments sometimes don’t follow central procurement guidelines and may act against the nation’s interest due to political differences with the central government.
“The government should publish data on surviving startups. It’s not just about how many have launched — it’s about how many have sustained and thrived. How many MedTech startups have become unicorns in the manufacturing sector? We should not compare them to companies like Zomato, Paytm, Flipkart, BigBasket, Ola, or Uber. We need to understand how many hardware startups have succeeded, and how many are receiving government contracts, repeat business, and exporting their products. This is the data that needs to be shared and analysed,” he said.
MedTech is a massive trillion-dollar industry, with only about eight countries as major players. The rest of the 180 countries are importers. While India holds a strong position due to its ability to manage low-volume, high-complexity products, giving it an edge over China, China excels at mass production, and it’s not easy to catch up with its infrastructure so quickly.
“We understand that even NITI Aayog has recommended shifting the MedTech sector from the Department of Pharmaceuticals to the Ministry of Electronics and IT (MeitY), but no action has been taken,” said Alva.
The government has made some progress with both domestic and international regulatory bodies, such as those in Europe and the FDA in the US. ‘We should adopt and adapt those international best regulatory practices,’ he suggested.
Alva reiterated that comparing the growth of the sector globally, it is clear that we have either stagnated or lost market share despite the new attention we’ve received.
(Edited by Majnu Babu)
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