In: Operations Management
There are five categories that play a role in the production sector of manufacturing medical devices. Suggest an approach to each category in a greener way with specific examples
Here my answer
The medical device industry covers implants, instruments and equipment intended for therapeutics, monitoring and diagnostics. These include reconstructive devices such as hip and knee replacements as well as implantable monitors for cardiac and diabetic care.
A medical device is any device intended to be used for medical purposes. Medical devices benefit patients by helping health care providers diagnose and treat patients and helping patients overcome sickness or disease, improving their quality of life.
Role of the healthcare Industry
Industry needs to align with the Government initiatives to fully realize the potential of Make in India, leveraging the Government’s policy and regulatory changes. While most initiatives have to be undertaken by medical devices manufacturers (both MNC and Indian companies), other key stakeholders (healthcare providers and health insurers) have an equally important role In facilitating the initiative. Additionally, the role of industry associations, funding agencies including PE/VC, incubators etc. is critical in supporting the development of the manufacturing ecosystem.
For example, initial models of the artificial cardiac pacemaker were external support devices that transmits pulses of electricity to the heart muscles via electrode leads on the chest. The electrodes contact the heart directly through the chest, allowing stimulation pulses to pass through the body. Recipients of this typically suffered infection at the entrance of the electrodes, which led to the subsequent trial of the first internal pacemaker, with electrodes attached to the myocardium by thoracotomy. Future developments led to the isotope-power source that would last for the lifespan of the patient.
Medical devices companies
• Develop India as a manufacturing hub: India needsto be viewed as a manufacturing hub for domestic demand as well for international markets covering both developing and the developed countries. Both MNCs and Indian organizations need to leverage local production to cater to domestic demand and international markets.
• Undertake frugal innovation or India basedinnovation in combination with indigenous manufacturing: Collaborating across Make in India and Innovate in India, the development of India based product innovations that can be manufactured locally could create attractive solutions for both
India and other emerging markets. The design and manufacture of products closer to the customer would lead to high quality and cost effective innovations
• Review and revisit India market operating model:Both MNCs and Indian companies need to revisit their operating models for India. Product / segment specific strategies need to be revisited/created, where low to medium technology products that have a precedence of manufacturing in India can be produced in large quantities to cater to underpenetrated domestic markets. Partnerships with Indian companies by MNCswould improve cost efficiencies and reduce time to market.
Partnerships with healthcare delivery players would enable innovative on business models. Additionally, MNCs need to view manufacturing in India as a risk diversification strategy, as ~30% of incremental demand for medical devices would come from India
Healthcare delivery companies
• Form partnerships with manufacturers to design and use new innovations: Healthcare delivery companies need to play an integrated role with medical devices players across multiple areas which could include
- Partner in formulating new innovations :Being closest to the customer, healthcare delivery companies would be a significant part of the ecosystem specifically in driving India innovation and products aligned to India requirements
- Support the innovation and manufacturing ecosystem :Healthcare providers need to support initiatives on innovation by the medical devices companies by enabling the testing of and awareness for the products. As these innovations are typically cost effective and result in cost savings, the benefits could be shared among the stakeholder community including patients. This would also support the brand building of Made in India medical devices
Government for the medical devices industry, the wider medical devices ecosystem from suppliers to customers, and the macro environment to create a conducive business ecosystem.
Government as a policy maker for the medical devices industry policy and regulatory measures for the medical devices industry have the potential to create an enabling environment that would set the direction for large scale indigenous manufacturing of various types of medical devices. These actions are pre-requisites to communicate to the medical devices industry and the wider healthcare community on the Government’s intent and actions to develop India as an emerging hub for medical technology.
Some of the key policies and strategies that the government could implement include
Independent regulations for medical devices: Whilethe Government has articulated that the industry is different from pharmaceuticals, the Drugs and Cosmetics (Amendment) Bill 2015 is pending in the Parliament of India. The bill needs to be prioritised to support the industry in having a distinct identity as it would then enable the industry have specific set of regulations
• Incentivizing medical devices manufacturing:Financialm measures need to be undertaken to incentivize manufacturing in this emerging sector and specifically in the early stages of creating the manufacturing ecosystem. Some of these could include:
- Providing CENVAT/Duty credit on raw material:
Parity of duty on raw materials with finished goods
should be maintained to enable the industry move
from the inverted duty structure.
• Ensuring quality with FDA or FDA equivalentc certifications Quality certifications that are globally recognised are critical for indigenously manufactured medical devices to compete with products from other countries. This requires domestic manufacturers to align their product quality and processes to global standards. The Government can play a role in enabling medical devices manufacturers with faster access to FDA or FDA equivalent certifications in a cost effective manner. A possible option is to set-up a fast track FDA desk in India, with the Government of India subsidizing certification expenses.
• Segment specific incentives: Product segmentsr ranging from low to medium technology and with a precedence of manufacturing in India can be focused on in the short term. These include disposables, consumables, certain imaging equipment, implants, stents, some categories of laboratory diagnostics equipment, innovative mHealth based solutions etc., which can be incentivized for indigenous manufacturing.
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