“Made in…” programs implemented to support domestic industry are not a new concept among global economies. Australia's program has been established for nearly 30 years and seen great success, while the Canadian government looked at a “Made-in-Canada” branding program as part of its Economic Action Plan 2014 and the US has seen a “Buy American” shift among many of the country’s consumers in recent years—though the jury is still out on how much of an impact the latter two programs truly have on the economy.
Following the election of India’s current Prime Minister, Narendra Modi, in late-2014 came an interesting new version of the “Made in…” template. Bringing the present tense to this classic concept, the “Make in India” program is focusing on building an entirely new infrastructure for the country’s economy—as opposed to simply promoting local businesses and their products, which has been the main emphasis in the aforementioned national programs—and this broad focus is already leading to exciting developments for the medtech sector. Such changes include the allowance of 100% foreign direct investment in medical devices and the creation of medical device industrial parks to increase domestic capabilities in this sector.
To date, the medical device industry in India has generally lacked both a focused regulatory body—medical devices are currently classified under regulations that are built for pharmaceuticals—as well as specific pricing structures, with patients being charged nearly three times import prices for devices such as drug-eluting stents. However, change is definitely in the air. Soon after the results of an extensive six-month cost survey performed by the country’s Food and Drug Administration that looked at medical device costs for the first time were released, the government issued a draft policy proposing the creation of a National Medical Device Authority (NMDA) and the implementation of pricing controls for this industry. The objective of this policy? “Strengthening the Make in India drive in [the] medical device sector”.
So, it looks like the country’s “building”—as opposed to the more common “branding”—mentality might be the clincher for the success of its version of the “Made in…” program template. The six-week industry response period for the NMDA draft policy recently ended, which should mean final regulations being ironed out and issued in coming months. Furthermore, the notion of pricing regulation is being brought to the forefront after the National Health Systems Resource Centre (NHSRC)’s submission of its final report to the National Pharmaceutical Pricing Authority (NPPA) regarding cardiac stent prices.
How will these and the other Make in India-inspired efforts occurring in the country impact competitors in the medical device space? Well, much remains to be seen. India’s fast-growing economy is definitely on the radar for foreign businesses and investors, and major medtech multinationals are certainly aware of the growth potential in this market—a US-India Business Council (USIBC) delegation that included a who’s-who of global healthcare leaders travelled to the country in July, conveying their commitment to working with the government and industry stakeholders as the country works to improve this sector of its economy. The main drive in India, though, is to fundamentally change the lay of the land in the country. Whereas the medical device industry is currently very import-driven, with domestic manufacturers focusing mainly on disposables and medical supplies and higher-end devices and equipment coming from outside the country, the NMDA draft policy is pushing for a reduction of dependence on imports. Thus, we are likely to see major shifts in the competitive landscapes for many device markets over the coming months and years, as regulations change and Make in India continues making waves in the country’s economy.