Express Healthcare (Vol.10, No.2) February, 2016

Page 13



Head – Consulting,North India,IMS Consulting Group


‘The earlier the government brings clarityin price regulation,the easier it will be for the device and equipment companies to firm up their India strategy’

‘To address the issue of affordability, the budget should move towards Universal Health Coverage’


016’s budget should be an appropriate time to announce concrete measures that will propel this nation towards better health, covering issues of affordability, access and some policy level changes to accelerate the rate of change. ◗ Affordability: To address the issue of affordability, the budget should move towards Universal Health Coverage through measures like: ■ Tax incentives for private insurance players to increase health insurance penetration, and increased government spend to subsidise/cover non-insurable or below-poverty-line (BPL) population ■ Encourage small and mid-sized businesses which employ a sizeable population to buy group health insurance for their employees by providing them tax incentives ■ Withdrawal of service tax on health insurance premium to make it more affordable ■ Tax exemption for primary care expenses and other non-insurable health spends through programmes like health savings account, etc. ◗ Access: Increased government spend from the current one per cent of the GDP to augment healthcare access to population viz. primary, secondary and tertiary services to rural areas.

edical devices and equipment industry plays a critical role in healthcare delivery. What sets this industry apart, unlike the other components of the healthcare value chain (viz. pharmaceuticals and services) is India’s high dependence on imports (~70-80 per cent). Theoretically, given the large unmet healthcare need and the current thrust of the Indian government, this sector naturally lends itself as a priority for ‘Make in India’. Local manufacturing is expected to ensure product quality and price control making healthcare more accessible and more affordable. However, the import trend does not seem to be changing anytime soon. A closer look at the current industry dynamics points towards certain policy imperatives that may be necessary to stem the tide. ◗ Creation of a robust regulatory framework relevant to medical devices and equipment: The current Drugs and Cosmetics Act treats devices at par with pharma products. This implies that the Act is not sensitive to certain nuances specific to devices and equipment. The amended Drug & Cosmetics Act proposed recently covers theses points. However, the proposed amendments

have been awaiting the nod from the parliament for more than a year. The government has also hinted at creation of a separate Department of Medical Devices. An amended Act with a separate ministry will be the right step in creating clear ownership within the Government to push the medical devices agenda. ◗ Clarity on the price regulations on devices: The Government has been hinting at price control in certain devices in line with drugs. Obviously, such an Act may impact profits and hence, in turn, also the investment decisions of the companies. The earlier the Government brings clarity in this matter, the easier it will be for the device and equipment companies to firm up their India strategy. ◗ Propose fiscal incentives specific to the industry: The current ‘Make in India’ programme can be specifically customised for a strategically important industry like medical devices. Features such as ‘medical device parks’ which provide tax holidays to tenants and preferential pricing for locally manufactured products can be considered. Further, rationalisation of the duty structure of imports needs to be done. ◗ Develop and sustain the manufacturing eco-

system: Skills such as biomedical engineering are in short supply in India. The supply gaps need to be plugged to make the initiative sustainable in the long term. Also, indigenous product and technology development capability needs to be nurtured to ensure truly ‘Make in India’ products in the future. These concerns pertaining to the medical devices industry in India have always been there and were raised many a times in the past without any modifications seen yet. However, this time we can witness a change with the Government’s actions and the will it demonstrates to address the import dependence through its ‘Make in India’ initiative.

The ‘Make in India’ programme can be specifically customised for a strategically important industry like medical devices


◗ Awareness: Drive awareness campaigns on health, safety, sanitation, etc. Educating and promoting the benefits of health finance to citizens ◗ Others: Improve efficiencies within the industry by allowing for uniformity in data exchange across various healthcare verticals ■ There is also a need to address few special groups such as senior citizens and differently-abled persons which are vulnerable, through special focus groups and dedicated financing arrangements. ■ It is definitely encouraging to see the recent reforms introduced to help the burgeoning start-up ecosystem in India. However, this move will need to be backed by specific initiatives within sectors that are expected to grow rapidly over the next few years. And healthcare is definitely tops that list. Last year alone, we have seen the beginning of the pro care/preventative approach, and a movement away from a cure-based one, with many players in the start-up ecosystem identifying the gaps in primary care services and leveraging technology solutions to make healthcare easily accessible. However, these steps need to move to the next level with a greater thrust from the government.



February 2016

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