MEDICAL DEVICES

Presented By: Rushikesh . S. MarkadManagement Scholar: 15PMM542Department Of Pharmaceutical Management,NIPER, Mohali.

FLOW OF PRESENTATION Healthcare Sector In India Medical Device Difference between Drug & Device Device Classification Medical Devices – Global Scenario US medical Device Market Indian Medical Device Market Regulations Current Scenario In India SWOT Analysis Conclusion

Earlier Scenario of Healthcare Sector in India

Healthcare Sector- Present Scenario

Source: Industry Report, Healthcare: India, The Economist Intelligence Unit, July 2014

$ 96.3 US billion

1 Bed/1050

Per capita $ 61 US

71% share in healthcare expenditure

0.7 Doctor/1000

33% share of govt. in healthcare

4%

Growth Pattern in Healthcare sector- India

2012 2013 2014 2015 2016 2017020406080

100120140160

FY

US $

Bill

ion 98

113

129

Source: RNCOS

•Healthcare Sector in India is growing at a CAGR of 10-11%

Revenue Split

HospitalsMeical Equipment and SuppliesMedical InsuranceDiagnosticsPharmaceuticals

71%

9%

4%3%

13%

Source: India Brand Equity Foundation, November 2011

Medical Device

Definition

As per Schedule M-III Medical tool which does not achieve its primary intended action

in or on the human body by Pharmacological, Immunological or Metabolic means

An instrument, apparatus, implant, in vitro reagent, or similar or related article that is used to diagnose, prevent, or treat disease or other conditions and does not achieve its purposes through chemical action within or on the body

Medicinal products covered under D&C act will not fall under schedule M-III

In case there is uncertainty about whether the product falls under drug or medical device category regulators will consider mode of action

Sector split

Orthopedic Implants & Prosthetics Cardiovascular Neurovascular Dental Life Science Tools & Services Patient Monitoring Equipment & Therapies Disposable Equipment & Supplies General Equipment & Supplies In Vitro Diagnostics, Supplies & Equipment Ophthalmic Goods, Optical Instruments & Lenses

Segmentation By Application- India

Source: Global marketing Emergo group Inc.

Segmentation By Revenue- India

Other medical & Therapeutic Devices

Spinal Devices

Cardiovascular Devices

Neuromodulation Devices

Diabetes Devices Urology Devices Surgical Tech-nology

22%

18%

10%

5%3%3%

6%

DIFFERENCE

Based on Chemistry & Pharmacology

Safety & Efficacy Clinical Trials Local and Systemic Toxicity Long Product Life Cycle Drug Interaction Large Population Less user interaction

Based on Engineering

Safety & Performance Clinical Evaluation Biocompatibility Short Product Life Cycle Device Malfunction Limited Population Significant user interaction

DRUG DEVICE

Device classification

CLASS RISK LEVEL EXAMPLE

A Low Risk Surgical retractors / tongue depressors

B Low-moderate Risk Hypodermic Needles / suction equipment

C Moderate-high Risk Lung ventilator / bone fixation plate

D High Risk Heart valves / implantable defibrillator

•As per Risk levels and Intended use

•Classified in accordance with Annexure-IX of Schedule M-III provided by

Drug Technical Advisory Board (DTAB)

Global Scenario of Medical Device Market

2011 2012 2013 20180100200300400500

Market Size

FY

UD b

illio

n

CAGR-

7.5%

• Indian Medical Device Market is growing at almost twice rate than Global market

GLOBAL MEDICAL DEVICE MARKET

USAWestern EuropeMiddle/East AfricaEastern EuropeAsia/ Pacific

Asia/Pacific24%

Western Europe24%

Source: EPSICOM

USA 45%

Eastern Europe 4%

Middle/East Africa 3%

• US• JAPAN• GERMANY• ITALY• FRANCE

USA(US $

120)

Japan

( US $

31.5)

BRIC( U

S $ 26

.28)

German

y( US $

23.38

) 0%

10%20%30%40%50%

market Share

Mar

ket S

hare

Major Players

Process Flow of Rise of Emerging Markets

MNC’s define the market and enter with high quality, usually imported

devices not available locally

Local companies identify the opportunity and reverse engineer/adapt to local

requirements and get prepared to compete with MNC’s

Survival of the Fittest

Step I

Step II

Step III

TOP 10 MEDICAL DEVICE MANUFACTURERS

Name of Company Revenue(In $US BN)

Market Cap($US BN)

Johnson & Johnson 28.7  294.2

General Electric Co. 18.1  243.6 

Medtronic Inc. 

17.1   61.2

Siemens AG  17  92.2

Baxter International Inc. 16.4  38.7

Fresenius Medical Care AG & Co. KGAA  15.2  21.1

 Koninklike Phillips 11.8  26.1

Cardinal Health Inc. 11.0  25.1

Novartis AG 10.7  227.5

Covidien plc 10.4  40.1

Mergers & acquisitions

2011 2012 Number of deals 443 330 Total deals (with values disclosed) Number of deals 191 141 Transaction value (£m) 28,293 28,820 Average deal size (£m) 148 204 Deals less than £500m (with values disclosed) Number of deals 181 133 Transaction value (£m) 10,370 7,393 Average deal size (£m) 57 56

Mergers & acquisitions

ACQUIRER TARGET DEAL VALUE (£ mn)Johnson & Johnson Synthes Gmbh 12745

Hologic Inc. Gen- probe Inc. 2388

Agilent Technologies Dako 1390

Boston Scientific Corporation

Cameron Health 869

Asclepius Zoll Medical Corporation

1367

EQT Parteners AB BSN Medical Gmbh 1452

Fujifilm Holdings Corp. Sonosite 624

Thermo Fisher Scientific

One Lambda 592

Linde Inc Air Products & Chemicals

487

US MARKET

• Valued at more than US$ 60 Billion• Accounts for 20% of global industry by production• World’s largest Medical device market and accounts for 45%

of global market by sales• In 2013 US have spend 18% of its GDP on healthcare which

is more than any other country• Domestic consumption- 40%• >6000 medical device manufacturers• Current Issue: 2.3% medical device tax under affordable

care act in 2010

Sector Breakdown of Deals

General Equipments & supplies

Patient monitoring equipment & ther-apies

Life Sciences tools & Services

Disposable Equipment and SuppliesOrthopaedic Im-

plants & prostheticsIn vitro diagnostics, supplies& Equipment

Opthalmic Goods, Optical Instruments & Lenses

Dental

Cardiovascular Neurovascular

14%

18%

17%12%

13%

6%

4%

6%7%

3%

INDIA

Medical Device Market By Segmentation

Column1

Medical and Di-agnostic Equip-mentsMedical ImplantsMedical Disposables and Supplies

56%25%

19%

Source: RNCOS

Factors Affecting Medical Device Industry

Medical Device

Industry

Local Market

Sentiments

Economic based factors Unmet

clinical needs due

to technolog

y mismatch

Regulatory

Environment

Healthcare

Providers Reimbursement Policies

FACTS

Market size- $ 7.9 US billion Contributes only 6% of India’s US $ 40 billion healthcare

sector It is growing at a faster annual rate of 15% than 10-12 %

growth seen in the Healthcare sector in its entirety >14,000 different products types, as per the Global Medical

Device Nomenclature (GMDN) Ranks 4th in Asia and 20th in the world 70% of the medical devices are met by imports

Growth of Medical Device Industry

2012 2013 2014 2015 2016 20170

2

4

6

8

1012

FY

US $

Bill

ion CAGR – 15.8%

5.15.9

6.8

7.99.2

10.7

Source: RNCOS

• Growth of Medical Sector alone is higher than the entire Healthcare sector in India

Top Players

• 3 M • India Medtronic • Johnson & Johnson • Becton Dickinson • Abbott Vascular • Bausch & Lomb • Baxter • Zimmer India • Edwards Life Sciences • St. Jude Medical

Regulation In Medical Devices

Regulation In Medical Devices

• India had no regulations for medical devices in place prior to 2005.

• The import, manufacturing, distribution and sale of medical devices in India are overseen by the Drugs and Cosmetics Act (1940) and Rules (1945).

• Controls and inspections are carried out by the CDSCO, state drug controllers and central/state laboratories.

• CLAA- Branch of CDSCO ( Major regulatory body)• All medical devices will undergo conformity assessment

procedures to ensure compliance with quality and safety standards before they are allowed to Indian markets

Regulation In Medical Devices

• CLAA will adopt to regulatory Standards of Bureau Of Indian Standards (BIS) and International Organization of Standards (ISO) specification for quality management

• For Class A devices- Manufacturers may perform their own conformity assessment procedures

• For B, C, D – CLAA in consultation with BIS publish list of notified bodies authorized to perform conformity assessment

• Imported Medical devices that are already approved in US/or and EU Union or that have been deemed equivalent to CE mark and FDA approved device will be allowed on Indian market without undergoing separate conformity assessment procedure

Regulation In Medical Devices- US

Classification according to 21 CFR 860 which is a part of Medical Device Amendments of 1976 and safe medical device act of 1990

Class I: General Control Eg: Elastic Bandages, Examination glovesClass II: General control with Special control Eg: Infusion pumps, surgical drapesClass III: General controls and premarket approvalsEg: Implantable pacemakers, pulse generator, HIV diagnostic

tests, Heart valves

List of Notified Medical Devices

Disposable Hypodermic Syringes Disposable Hypodermic Needles Disposable Perfusion Sets In vitro Diagnostic Devices for HIV, HbsAg and HCV Cardiac Stents Drug Eluting Stents Catheters Intra Ocular Lenses I.V. Cannulae Bone Cements Heart Valves Scalp Vein Set Orthopedic Implants Internal Prosthetic Replacements

Growth Drivers & Restraints

Drivers:• Expanding Healthcare

Sector• Changing Demographic

profile• Booming economy• Ageing population• Increase in outsourcing• Increased prevalence

of Lifestyle Diseases• Telemedicine

Restraints:• Reliance on Import• Lack of access to

technology• Regulatory system• High capital requirement• Lack of Government

interest• Less expenditure by

Government in healthcare sector as compared with other nations

Current Scenario

• Medical Device and NPPA• Amendment of D & C Act• Regulated Medical Devices sector• Role of Government

Regulatory Control Make In India Foreign Direct Investment Education of Medical Devices Medical Device Parks National Centre of Medical Devices

SWOT Analysis

• FDI• Increas

ed JV

• Regulations• Monopoly of

MNC’s

• Low per capita expenditure

• Unaware rural market

• Huge Market• Growing Private hospital

Sector

Strength Weakness

Opportunity

Threats

Conclusion

• Medical Technology companies are accelerating their Investments in emerging markets and India is a prime target because of its growing population, growing middle class and improving healthcare infrastructure

• Till date most Medtech multinationals have pursued a conservative business strategy and operating model in India focused on delivering their existing offering to the premium segment of the market

• But now the playing field is becoming more competitive and companies in search of growth need to move beyond the traditional model