US MARKET -- $63 billion in sales and 420,000 people employed in 1996/1997.

UK MARKET -- £5 billion of manufactured output (net exporter)

JAPAN -- $9 billion -- 20% imported (net exporter)

BRAZILIAN MARKET -- $3.3 billion in 1997 with 50% imported

CHINA – $1 billion – 50% imported in 1997.

With the worlds second largest population, Indian health care sector offers medical device manufacturers enormous opportunities. The expansion in the medical devices market as a result of rapid expansion in speciality health care services in the last two decades, has been tremendous. With continuous improvements in the nations health care system currently accounting for 6% of GDP, this market will continue to steadily grow in the coming decades.

The Indian medical device market is estimated to be Rs.5000 crores now [1, 2]. The expected growth rate is 12% to 15% for the next decade. Of this Rs.5000 crores, 80% is met by imports. This implies that the current indigenous production is only about 1000 crores. There are about 90 indigenous manufacturers of which 20 dominate the production; most of them being joint ventures and foreign collaborations [3]. According to the Confederation of Indian Industry, there will be almost 10,000 private hospitals in India by the turn of the century. This is in addition to the three-tier medical care system provided by the government.

INDIAN PATENTS IN HEALTH CARE PRODUCTS

Figure 1 shows the number of patents that have been filed in this sector during the period 1973 to 1998. There has been a steady increase in both the Indian and foreign patent filings. However, with the expanding market and the new IPR regime, one can expect a substantial increase in the filings of the foreign patents in India. Overall, the numbers are small in comparison to the large size of the market. It is clear that the level of R&D and innovation in this sector in the country is still very small.

The existing IPR does not provide any additional protection to Indian developers unlike the pharmaceutical and chemical industry sectors. In fact, it has worked against the patentees in some cases as described below.

Sree Chitra Tirunal Institute for Medical Sciences and Technology, Trivandrum has filed over 65 patents in the area of medical devices and biomaterials, out of which 35 have been sealed and the balance are under processing. Biomaterials like dental composites, hydroxyapatite for dental and orthopedic applications, anti-bacterial coatings for catheters have been treated as drugs and only a 7 year patent has been awarded. Considering the time taken to examine and seal the patents, the actual commercial life of these patents has been extremely short, thus vitiating the original concept of patent protection.

Further many medical devices have been allowed to be imported all these years with little not or no duty in view of their life saving nature. Hence, the market has always been open to international competition. Considering these points, it is clear that the new IPR regime should be beneficial to the Indian R&D. The main challenge will be to produce products of international quality at lower prices. This is already the case as most Indian doctors, especially in critical care areas predominantly prefer better quality devices and Indian patients, who can afford these levels of treatment also demand the best in quality.

STRATEGIES FOR R&D

At present, it is clear that the basic need of this sector in the country is high levels of R&D investment with a concerted programme for the development of the medical device industry. A study by the Academy of Engineering in USA [5] and an initiative taken in UK in 1999 by the Engineering and Physical Sciences Research Council (a public funded organization) [6] give a clear picture of how similar approaches can be beneficial to us.

a) National Academy Of Engineering study

In 1998, the National Academy of Engineering of USA launched a study to document and assess the contributions of academic research to the performance of U.S. industry. One of the five areas studied was Medical devices and equipment (MDE). The main conclusions of this study are :

Has considerable public and Government R&D support

Academic medical centers provide a unique environment for testing and clinical evaluation for regulatory approval

Academic research has been an important source of key ideas that generate significant technological opportunities through fusion of knowledge of what’s doable with knowledge of what needs to be done.

The breadth of research contributions have ranged from graduates trained in modern research techniques, to fundamental concepts and "key ideas" out of basic and applied research, to the development of tools, prototypes, and marketable products, processes, and services

Provides a training ground for future entrants into the industrial workforce. Integration of research and education helps create an outward flow of human resources from the university that results in an educated industrial work force as well as new "spin-out" companies and start-ups.

Demand for research-trained graduates is particularly high in the MDE industries.

Increased Intellectual Property Rights (IPR) awareness among individual researchers, universities and industry leading to increased patenting activity. This leads to new avenues for entrepreneurial energies of academic researchers to pursue, and new products, services, processes, and companies to show for it.

 

 

The Engineering and Physical Sciences Research Council of UK (a public funded organisation) took an initiative in 1999 to promote and develop the medical engineering sector. The main points put out and the outlines of this initiative are :

 

Significant growth rates within the area of Healthcare are predicated world-wide. Public expenditure on healthcare in many countries is rising to levels that are of concern to national governments.

A concerted programme to improve the competitiveness in this sector will have a significant impact on both balance of trade and employment.

Trend Drivers facing the industry are

Move towards primary care

Move to reduce hospital stays

Increasing complexity of medical systems

Cost pressure and focus on cost effectiveness

Information and communications technology

Genome Project

Biological engineering technologies

A number of important issues have been highlighted to justify the need for Public funding :

Fragmented industry

Large number of small companies who spend very little on R&D

Research/Innovation gap

Fragmented purchasing - "Who is the customer"

Too little spent on research with medium term payback

Evaluation timescales delaying good technologies

High level of commercial risk and uncertainty.

Shortage of skills in industry and lack of awareness of commercial issues in academic environment have been cited as a major hurdle to commercialisation of IPR.

The programme will help to build stronger links between industry and academia that should stimulate a freer flow of knowledge and people.

In particular, specific encouragement will be given to the development and support of training opportunities at Masters and Doctorate level in Medical Engineering.

The budget in the table below gives an indication of their commitment and the requirements to develop this sector.

CONCLUSION:

In this sector of Medical devices and equipment, the new IPR regime brings no new challenges. The competition has always been open with the medical community generally demanding the best in quality.

The Indian industry in this sector is relatively small and needs to be expanded considerably. Substantial investments by public /government in R&D in the academic sector and promotion of the industry is essential for wealth creation and greater self reliance.

REFERENCES