Budget 2022: India’s need to invest in the right healthcare technology to achieve its broader goal of ‘Svasth Bharat’
There is now a growing need for stakeholders to further tap into the medical technology and medical device segment, which in the next ten years could become the golden investment destination.
By Sumit Bagaria,
The health and pharmaceutical sector is a resilient and buoyant pillar of our economy and has been the subject of numerous reforms. The pandemic has also opened many opportunities and innovations for the use of health technologies, telemedicine, digital records, artificial intelligence, diagnostic kits and home collection. There is now a growing need for stakeholders to further tap into the medical technology and medical device segment, which in the next ten years could become the golden investment destination.
Financial reforms have transformed the pharmaceutical sector
With a greater burden of prioritizing health care, the 2021 budget saw a 137% increase in funding, with a focus on self-reliance. The announcement of the creation of medical parks, the incentive for the production of APIs and the possibility of investing up to 100% via FDI have undoubtedly helped. Programs such as National Health Mission and Pradhan Mantri Atmanirbhar Swasth Bharat Yojana have also been introduced to strengthen the health system.
Now, as another budget session approaches, the industry must work in synergy to create a global innovation hub and focus its efforts on expanding health technologies. Although it is the third largest exporter of vaccine supplies and generic drugs, the medical technology and devices sector is still 70% dependent on imports, which prevents us from achieving atmanirbharta (self-reliance) and national gains. Increased investment will also help the sector rebound, itself following the impact of COVID-19-induced declines in elective surgeries and global supply chain shortages and disruptions.
The med-tech segment offers space for abundant growth
In a country that is home to more than 21% of the global burden of disease, having affordable, reliable and quality health technologies is essential. Now is the time for investors to strike the iron while it’s hot. Indian medical technology is expected to reach $50 billion by 2025 and register a CAGR of around 35.4%, which is unprecedented. The segment undoubtedly has huge potential that can target the low penetration of native devices, both nationally and internationally. We need to harness the right opportunities and incentives to help it reach its true potential. Numerous growth opportunities and credible investments can also reduce our dependence on international suppliers.
Screening tests for cancer, anemia, diabetes and other non-communicable diseases and the easy availability of accurate, affordable and accessible diagnostic tests is another segment that should be explored further. It has proven vital during the pandemic and should be considered strategically. By increasing spending, this can help with early detection and treatment and improve the quality of health services. As we strive to achieve self-sufficiency, we must rapidly accelerate screening and early detection of diseases like cancer, which will lead to better treatment and reduced burden in our tertiary care hospitals, where patients usually come when the stage and spread of the cancer can be difficult to treat, like many countries including China, we must have a strategy of using the world’s best and proven technologies, while encouraging and supporting Indian R&D and manufacturing. In women’s health, for example, screening for breast and cervical cancer has saved hundreds of thousands of deaths across the world, and so has India (with its large population and limited health infrastructure) can help save lives.
Empowering Innovators and Small Manufacturers with Lucrative Incentives
Substantial investments have been made to boost local manufacturing, including earlier funding of over Rs. 3,420 crores. Policy changes should further focus on incentivizing foreign investment and business with subsidies such as tax exemptions, PLIs, fixing duty structures to monetize benefits for manufacturers in the MSME sector. Investments aimed at creating early-stage venture capital funds to support India’s many innovators and start-ups, which are experimenting with new era technologies such as 3D printing, robotics and unique surveillance tools, will deeply encourage and create a pipeline of supportive talent for the future.
The government should dramatically increase its health spending, creating both infrastructure and screening programs, and encourage Indian scientists and companies to develop the best medical technologies and devices in India.
(The author is MD & CEO, Hemogenomics. The opinions expressed are personal and do not reflect the official position or policy of Financial Express Online.)