Most Indian medical device companies face logistics challenges especially when it comes to inaccurate inventory data, delays in supplies, and lack of transparency. How can companies tackle this issue and what are the essential traits a medical devices company should know before choosing a logistics partner?

An effective logistics network is the cornerstone of every successful organization, and its significance cannot be disputed. Establishing an integrated digitalized supply chain network, complete with tracking and tracing analytics across the value chain in order to enhance the customer experience, is one approach for overcoming the difficulties resulting from inefficient logistics. It results in four tangible benefits for businesses: increased flexibility and agility, reduced operational risk, more informed decision-making, and the establishment of a standard that can be used to develop performance indicators and identify important bottlenecks. With good analytics, businesses will be able to adapt to disturbances rather than only respond to them.
Identifying service providers who are focusing their investments on integrating blockchain technology into their business is an alternative solution. Innovations in the supply chain enabled by blockchain technology will have the ability to generate great business value by boosting supply chain transparency, lowering supply chain risk, and enhancing supply chain management overall.

Owing to the high cost of innovative medical devices, it is now largely the responsibility of manufacturers to help buyers secure sources of funding. How did this impact the operations of medical devices companies and what are the unique challenges that arose due to this?

In healthcare, there are two types of financial challenges: supporting the development of the innovation and determining who will pay how much for the product or service it produces. It is a well-known fact that technological innovations encounter several challenges. On the accountability front, an innovator confronts the difficult challenge of complying with governmental regulations, which increasingly require enterprises to demonstrate that new products not only perform what they claim but are also cost-effective in comparison to competitor's offerings.

In terms of funding, the innovator must consult with insurers well in advance of the launch to determine whether the product will be reimbursed, which is usually easier if it is intended for treatment rather than diagnostics. To obtain this permission, the innovator will often seek assistance from industry stakeholders such as physicians, hospitals, and a variety of influential intermediaries such as group purchasing organizations (GPOs), which pool the purchasing power of thousands of institutions. GPOs often prefer vendors with diverse product lines over those with a single product.

Innovators must address the economics of insurers and healthcare providers, as well as their interdependence. For example, insurers do not normally pay for capital equipment individually. A seller of a novel anesthesia technology, such as a vaporizer, must, for example, be prepared to assist its hospital customers in obtaining greater reimbursement from insurers for the increased price of the new devices, or to seek synergies with makers of anesthetic gases.
Innovators must also take care to select the ideal parties for new technology adoption and then provide them with comprehensive medical and financial information. Traditionally trained surgeons, for example, may be skeptical of minimally invasive surgery (MIS) techniques.

Finally, the government's role as the principal payer for health-care services can result in a unique dynamic.

Last year, the Indian Council of Medical Research (ICMR) collaborated with Indian Institutes of Technology (IITs) to establish ‘ICMR at IITs’ by setting up Centres of Excellence (CoE). The primary aim of this tie-up is product development and commercialization in the medical devices space. This is just one of the many unique initiatives introduced by the government. How do you view the impact of such initiatives when it comes to improving the medical devices industry in India going forward?

In addition to the launch of the Production Linked Incentives (PLI) plan, this is a positive move by the government for the selected medical technology sector. The indigenous industry, which is dominated by micro, small, and medium-sized enterprises (MSMEs) with an annual turnover of less than INR 250 crore, faces the greatest obstacles in product creation and development.

However, much more must be done to improve the status of the Indian MedTech industry, beginning with predictable and stable laws, an increase in domestic demand for medical technology goods, pricing, taxation, skilling, and incentives for ancillary and material suppliers.