The government soon is coming out with a slew of policy decisions to give a critical push to the medical technology sector as a part of the Make in India program, which include evolving a regulatory mechanism for the sector through a separate legislation, over hauling tax structure to make the domestic production of medical equipment more competitive introducing purchase preference for boosting local manufacture and stress on Research & Development.
Announcing these measures at the CII organized 8th Medical Conference with the theme : “A $ 50 billion Medical Technology Industry: Making it Happen in India” held on 28 August, 2015 in Delhi, Dr. VK Subburaj, Secretary, Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers, Government of India said that a separate regulatory system for the medical equipment domain could unleash the potential. For this, he stressed that the sector should have a critical mass and a solid growth trend. “Achieving $ 50 billion turnover by 2025 as envisaged by the CII whitepaper would be the right place for bringing out a separate regulatory mechanism. The healthcare sector in India would be growing 4 to 5 times from the present level necessitating a separate body to regulate the industry”, he said.
Dr Subburaj said that Prime Minister’s office is taking a lot of interest in pushing various schemes for boosting the medical equipment production. It is being monitored regularly and the Department of Pharmaceutical has been empowered to implement the schemes without any loss of time. He also mentioned that the stakeholders like CII have been giving suggestions on a fast track to bring about reforms in the sector. With this, it would be possible to come out with the report indicating varous changes that are needed in the sector in three months’ time.
Referring to the anomalies in the tax structure that act against local manufacturing of medical equipment, the Pharma Secretary said, “This is being examined at the highest level taking inputs from PM’s office, Finance, DIPP and his Department”. We hope to correct these anomalies well in time to create an eco - system for local manufacturing. The industry has been taking up with the Government the inverted tax structure wherein the import of raw materials is taxed higher than that of finished and semi - finished goods.
Another area which is engaging the attention of the government, Dr Subburaj said was purchase preference for the equipment manufactured by Indian companies. More than two-third of the medical equipment are imported. At the same time, some of the locally manufactured equipment are competitive both in quality and price. There are 800 units in India across large, medium and small sectors manufacturing medical equipment in the country. With the higher turnover of the healthcare sector, the number of these units would go up in the near future. “We are looking at the tender documents to enable sourcing of equipment locally to give a big boost to medical equipment sector in the country”, he added.
R&D, Dr Subburaj said should engage active attention of all stakeholders including the Government to boost the medical equipment production in the country. Presently, there are various departments in the Government such as Science and Technology, Biotechnology, various specialized institutions etc. which are involved in R&D and in evolving incentives for innovation and discovery. He said “We are devising measures for better coordination among these bodies not only for facilitating discoveries and innovations but also for marketing them,” adding that these activities would be coordinated by Pharmaceutical department. Also, a separate website would be launched so also a Year Book listing out innovations, expertise, discoveries etc. to create an eco - system for boosting R&D in the segment.
Dr Subburaj underscored that the basic objective of healthcare system was to make treatment affordable and accessible by the people. Presently, the total number of surgeries done in India are between 1.5 to 2 lakhs, whereas the demand was for performing 25 lakh surgeries. The reason for not doing the surgeries were either due to lack of facilities for diagnosis or non-affordability of the patients for undergoing the costly surgeries. By making medical system cost effective, there is tremendous scope for expanding the healthcare system, particularly the medical equipment domain.
Earlier, in his welcome address, Mr Himanshu Baid, Chairman, CII Medical Technology Division and MD, Polymedicure Ltd, has laid a roadmap for achieving the potential of the medical equipment segment which is presently dependent on imports to the extent of 70 percent. These included introduction of regulatory mechanism, a national innovation policy, strengthening of manufacturing facilities and plugging capability gaps.
Mr Pavan Choudary, Co-chairman, CII Medical Technology Division and MD, Vygon India Pvt Ltd, said that care has to be taken while correcting the inverted tax structure in the medical technology sector. A higher customs duty on the import of medical device would lead to proliferation of smuggling from nearby countries thereby endangering patients with devices which do not have adequate legal and service guarantees.
The others who spoke at the meeting included Mr. Rahul Guha, Partner and Director, The Boston Consulting Group and Mr. Suresh Vazirani, CMD, Transasia BioMedicals Ltd.
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