Q&A: Medtronic India Head On Industry Challenges And Devices’ Future

Medtronic India managing director and vice-president South Asia Milind Shah has done in the Indian medical devices industry what his peers in the drug industry are trying hard to emulate. A few years ago Medtronic kicked off a hitherto unknown disruptive financing model that made high-quality stents affordable to needy Indian patients while largely keeping intact the financial goals of the company.

In an interview with PharmAsia News, Shah, who has a chemical engineering degree from the Indian Institute of Technology and a management degree from the prestigious Indian Institute of Management, opened up on a range of broad issues including ongoing moves to control prices of devices in the country and revealed new areas where Medtronic sees more outreach opportunities.

PharmAsia News: How does Medtronic PLC characterize the Indian medical devices and diagnostics industry? Can you share some numbers related to the size, growth and comparisons with other emerging markets like China and Brazil?

Milind Shah: The medical devices and diagnostics industry valued at around $5 billion contributes only 6% of India’s $80 billion healthcare sector. The industry is still in a very nascent stage in the country. However, at the same time, India has a very high burden of lifestyle diseases like cardiovascular diseases resulting in a high mortality rate.

The key reasons behind this are inadequate hospital infrastructure and physician capacity, low patient awareness and patients not getting diagnosed in time. The Indian medical devices and diagnostics industry is growing at double digit rates from a volume perspective but due to consistent price decline, the growth in value terms is significantly lower (Also see "India’s Device Sector At A Crossroads: Will New Policy Push Growth?" - Scrip, 15 Nov, 2013.).

The emerging markets for medical devices show different patterns across different parts of the globe. China is one of the fastest-growing medical device markets in the world. But unlike India, the public healthcare system in China is very strong. China is the fourth-largest market for medical devices in the world and also the second-largest market for medical devices in Asia after Japan.

Brazil is the largest market in Latin America and though significantly higher than India, the per capita medical expenditure is low there. Also, the imports of medical devices hold a lower share of the market than in other parts of Latin America, while in India imports roughly 70% of its medical devices. Each emerging market is different in its own way.

PharmAsia News: In India, Medtronic came up with a few highly praised market penetration ideas like financial assistance for its cardiac stents. Can you describe how those have been accepted in the Indian market? Did you see a surge in your uptake of key brands with this model?

Shah: Medtronic has developed a business model called ‘Healthy Heart for All’ (HHFA) under which heart care devices like stents, implantable pacemakers, cardiac resynchronization therapy device, heart valves and ICDs ( implantable cardioverter defibrillator) are made available to more people.

A unique feature of this model is that needy patients are provided quick loans so that they can get the device by paying as low as 15% of the cost and the rest through equated monthly installments over a period of time.

The program has received a good response and has already reached over 35 Indian cities. Even people with a monthly income of as low as INR8,000 [$125] to INR 10,000 have benefitted from this scheme.

We have tied up with over 100 hospitals to offer all the services of HHFA like screening camps, counseling to patients and of course, financial assistance to make therapy accessible and affordable to the people – who would have otherwise have not got treated at all.

Under the initiative, over 100,000 patients have undergone screenings for heart diseases, out of which 12,000 patients have received treatment, with the financial assistance facility been availed in over 600 cases. Loans have been provided for devices varying from INR30,000 to INR850,000 under the program so that the people can avail of the treatment they need.

PharmAsia News: In terms of the technology prowess, it is known that Indian companies are at a nascent stage in medical devices. But do you see with help, they can build innovative products/models that are suitable to Indian conditions and are cost efficient? Have you seen any such Indian companies closely for future linkages?

Shah: The medical devices industry is highly innovative and both start-ups and established companies play an important role in this innovation cycle. Quite often, start-ups need partnership from the more established companies in conducting clinical trials to develop safety & efficacy evidence and for improving the customer reach of their products. Medtronic too works with such companies in India as well as other Emerging markets.

PharmAsia News: How do you want to see the challenges posed by the widely debated issues of high prices of lifesaving medical devices in India? What formula would you suggest to the government to strike a balance where you have reasonable incentives and the government leaves the industry free from its controls? (Also see "Indian State FDA Calls For Probe Into ‘Exorbitant’ Stent Costs" - Scrip, 31 May, 2015.)

Shah: What needs to be noticed is that pricing alone is not the only barrier in patients getting the right treatment for their ailments. Improvements in hospital capacity, implanting skills of doctors, disease diagnosis and most importantly public awareness are also very important to improve patients’ access. A holistic and coordinated approach is required to address all barriers simultaneously to help progress the goal of universal healthcare.

The NIC data recently showed that the rate of growth for heart interventions or angioplasties has actually fallen to almost 14% in 2014 from about 22% in the preceding year, despite the cut in prices, and the capping of stent prices under government schemes.

Affordability is a significant challenge in India due to low public reimbursement and the industry is very conscious of its responsibilities in this area. As an example, the average industry price realization for medical devices in India is amongst the lowest in the world and despite inflation, prices have been going down every year.

Medtronic has also reduced its product maximum retail prices in 2011 and 2014. The final patient price, however, is determined by hospitals based on the service and infrastructure required.

In addition to low price realization, the industry invests considerable resources in improving patient access through physician education, disease diagnosis and public awareness. Medtronic trains about 5,000 physicians every year at its training centers in Mumbai, Delhi and Chennai.

PharmAsia News: On the corporate side, what has been the effect of the Medtronic Minimally Invasive Therapies buyout in India? Do you intend to pump in more investments to boost presence here? (Also see "Emerging Markets Provide Leapfrog Opportunity For Covidien-Medtronic" - Scrip, 19 Jun, 2014.)

Shah: Together, Medtronic and Covidien will advance Medtronic’s mission by treating more people, in more ways and in more places. The combined company brings together a compelling and unique set of technology, service and assets that when combined, allows us to innovate in new ways and deliver new forms of value to patients and customers.

The combination of Medtronic and Covidien creates a robust, market-leading medical technology and services company with a comprehensive product portfolio, broad geographic reach, and diversified growth profile. We believe Covidien meaningfully complements and accelerates our three primary strategies - therapy innovation, globalization, and economic value.

We are focused on delivering a strong launch cadence of leading healthcare innovation, addressing the inequity in healthcare access globally, and becoming a leader in the changing value-based healthcare landscape with offerings that deliver both clinical and economic value to a broader set of partners around the world, including physicians, hospital systems, payers, governments, and patients.

The addition of Covidien has strengthened our long-term market competitiveness and increased our financial strength and capital deployment flexibility, driving further sustainability and consistency in our long-term performance. We believe that execution and reliable performance, combined with our disciplined allocation of capital, will create long-term value for our customers.

Most importantly, our company brings together patient-focused employees who are the finest in our industry. This collective ingenuity and creativity, when combined, has the ability to literally transform healthcare. The new company affords our people tremendous growth opportunities to advance their professional development and achieve their personal goals.

PharmAsia News: The area of wearable devices is buzzing all over the world. How is Medtronic seeing these future applications for countries like India? Have you planned to work on any projects that are suited to Indian needs and help the patients in terms of greater compliance?

Shah: The medical devices and diagnostics industry has evolved rapidly over the past few years, as a result of which now we have medical devices in the form of wearables. The ongoing development and increase in wearable medical devices follows the greater health trend to move from hospital care to home care, and subsequently to personal health care. At Medtronic, we have various devices that are wearable and improve patient outcomes.

“SEEQ” is an External Cardiac Monitor [ECM] which was developed with a focus on Indian market. While an ECG monitors the heart for a few minutes or seconds, the ECM has the capability to monitor a patient for 24 hours up to seven days, and hence, has a higher chance of providing a diagnosis to patients whose symptoms occur infrequently.

The SEEQ is indicated for patients who experience symptoms that suggest an irregular heartbeat or syncope [fainting], light headedness, vertigo, palpitations or shortness of breath, and whose symptoms were not detected by a 24-hour Holter monitor.

CARELINK is a bedside device that allows the physician to remotely monitor an implanted device in a secure mode via the internet. By this the patient is actually in contact with his physician 24/7, and information of any irregularity or episode gets to the doctor immediately.

Our R&D set-up in Bangalore is currently working to develop a new hemodialysis machine that will cater to the needs of this region. The new system will reduce the usage of treated water for hemodialysis by about 90% from the current 120 liters. Dialysis machine will be portable, green and safe for the environment. This will increase the access of hemodialysis for patients who presently are suffering due to the lack of dialysis centers and systems in India.

A patient today needs to travel to far off centers three times a week for dialysis which makes it near impossible or at least greatly in-accessible for the large number of population suffering from end stage renal disease in the country.

PharmAsia News: India is set to become the heart disease capital of the world in the next few years.  Yet not many procedures like angioplasty take place in India every year. What do you think are the primary reasons for this?

Shah: India remains a country with highly under-diagnosed cardiovascular disease and even less treated through coronary interventions. The number of people accessing cardiac procedures is very low here. According to a recent NIC report, only 2.48 lakh [248,000] coronary procedures were conducted in 2014, contrary to the myth that around 12 million angioplasties are conducted each year.

Cardiovascular disease in India remains highly under-diagnosed and even less treated. Studies in the past have observed that in the U.S., about 32 out of 1,000 coronary heart disease patients get treated with PCI [percutaneous coronary intervention] whereas in India, only about three out of 1,000 coronary heart disease patients get treated with PCI (Also see "Heart Breaking: India Shows Sharp Rise In CVDs" - Scrip, 7 Apr, 2015.).

The crucial reason behind this is lack of awareness, affordability and accessibility of medical technology. Most people are not aware about life saving procedures like angioplasty and it is necessary that all the stakeholders, including medical device companies, come together and create an appropriate environment for medical technology to touch the lives of people of India.

We partner with hospital systems and the government to achieve this, as it is also our mission to alleviate pain, restore health and extend life around the world.