Analysis of the market for the production of medical equipment in India
The relevance of research
The market for the production of medical equipment in this study refers to the totality of enterprises engaged in the production of medical equipment; enterprises that form the offer of this market; consumers using the above products, forming demand; as well as their relationships arising between sellers and consumers of medical equipment within the geographical limits of India
Purpose of the study
Analysis of the state of the medical equipment market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the medical equipment market
Content
Part 1. Overview of the Indian medical device manufacturing market
1.1. Definition and Characteristics of the Indian Medical Device Manufacturing Market
1.2. Dynamics of the volume of the Indian market for the production of medical equipment, 2015-2019
1.3. Market structure by type of service provided in India
1.4. Structure of the market for the production of medical equipment by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors influencing the market for the production of medical equipment
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2: Competitive Analysis in the Medical Device Manufacturing Market in India
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of consumption of medical equipment production
3.1. Estimated per capita consumption of medical equipment production
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast of the development of the market for the production of medical equipment until 2024
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations to existing market participants
Research excerpt
Part 1. Overview of the Indian medical device manufacturing market
1.1. Definition and Characteristics of the Indian Medical Device Manufacturing Market
Consider the characteristics and features of the medical equipment manufacturing market in India.
The market for the production of medical equipment in this study refers to the totality of enterprises engaged in the production of medical equipment; enterprises that form the offer of this market; consumers using the above products, forming demand; as well as their relationships arising between sellers and consumers of medical equipment within the geographical limits of India.
According to the definition of the Federal Service for Surveillance in the Sphere of Health of India, medical devices are any instruments, devices, devices, equipment, materials and other products used for medical purposes alone or in combination with each other, as well as together with other accessories necessary for the use of these products for their intended purpose, including special software, and intended by the manufacturer for the prevention, diagnosis, treatment and medical rehabilitation of diseases, monitoring the state of the human body, conducting medical research, restoring, replacing, changing the anatomical structure or physiological functions of the body, preventing or terminating pregnancy, functional the purpose of which is not implemented by pharmacological, immunological, genetic or metabolic effects on the human body.
In accordance with the Regulations of the Ministry of Health of India, approved by the Government of India on June 19, 2012. No. 608, the Ministry of Health of India performs the functions of developing and implementing state policy and legal regulation in the field of healthcare, compulsory health insurance, and circulation of medical devices.
The authority to exercise state control over the circulation of medical devices and monitor their safety is vested in Roszdravnadzor, which is the main regulatory body at the stage of bringing products to the market and monitoring their circulation in accordance with the Regulations on the Federal Service for Surveillance in Healthcare, approved by a government decree India dated June 30, 2004. No. 323.
The functions of developing state policy and legal regulation in the field of the medical industry are carried out by the Ministry of Industry and Trade of India (Regulations on the Ministry of Industry and Trade of India approved by the Government of India Decree of June 5, 2008 No. 438). Medical devices are allowed for circulation in India only after their state registration with Roszdravnadzor.
To the functions of Roszdravnadzor in terms of medical devices, incl. medical equipment include:
- state control over the circulation of medical devices;
- state registration of medical devices;
- monitoring the safety of medical devices;
- receiving and accounting for notifications of the commencement of activities in the field of circulation of medical devices (with the exception of clinical trials of medical devices, their production, installation, adjustment, use, operation, including maintenance, as well as repair);
- maintenance of the State Register of medical devices and organizations (individual entrepreneurs) engaged in the production and manufacture of medical devices;
- implementation of licensing activities for the production of production and maintenance (except for the case when maintenance is carried out to meet the own needs of a legal entity or individual entrepreneur) of medical equipment.
In 2019 according to Rosstat, more than 3 thousand enterprises and individual entrepreneurs engaged in the production of medical equipment and instruments functioned in India. According to the Ministry of Industry and Trade of India, most of the operating enterprises, according to the criterion of annual production, are classified as small and micro enterprises.
The Indian market for the production of medical equipment and its development depends on the state strategy and programs in the field of healthcare and the medical industry, in particular on:
- the national project ""Health Development"", one of the directions of which is the re-equipment of medical institutions with medical equipment;
- ""Strategies for the Development of the Pharmaceutical and Medical Industry of India for the period up to 2020"";
- ""Strategies for the development of the medical industry until 2030"";
- federal target program ""Development of the pharmaceutical and medical industry in India for the period up to 2020. and further perspective"";
- the state program of India ""Development of the pharmaceutical and medical industry"" for 2013-2020"". The strategy and adopted programs regulate planning and determine the priority areas of state policy in the development of domestic production of medical devices;
- ""Strategies for the development of medical science in India for the period up to 2025"", which is aimed at implementing the state policy in the field of healthcare, improving the quality and accessibility of medical care to the population of India, including the development of medical science and innovation in the field of healthcare, improving the effectiveness of fundamental and applied scientific research, creating conditions for sustainable demand for innovative products and their implementation in practice.
The main goal of the adopted and ongoing strategies and programs is the transition of the Indian medical industry to an innovative development model, which is achieved through the formation of its technological, production and innovation potentials.
1.2. Dynamics of the volume of the Indian market for the production of medical equipment, 2015-2019
Consider the dynamics of the volume of the market for the production of medical equipment.
The Indian market for the production of medical equipment is considered one of the most promising in the world due to the high population, the presence of significant financial resources at the state level and the high need for re-equipment and modernization of the equipment of medical institutions in the Indian healthcare system. Nevertheless, despite the high prospects, the Indian medical equipment manufacturing market occupies only ~…% of the world market.
Diagram 1. Dynamics of the market volume of medical equipment and instruments, 2015-2019
According to the Accounts Chamber of India, institutions subordinate to the Ministry of Health of India mainly purchase imported equipment, while the states of India purchase domestic equipment. Despite the ultrasound machines and angiographs produced by domestic enterprises, their purchase for state and municipal needs was practically not carried out. There is also a low share of purchases of domestic computed tomographs.
1.3. Structure of production by types of medical equipment in India
Consider the structure of production by types of medical equipment.
In third place is the production of pacemakers ...
1.4. Structure of the market for the production of medical equipment by Union Territories
In terms of the geographical structure of the medical device manufacturing market in India, …% of the market volume in monetary terms is accounted for by …
Diagram 3. Structure of the market for the production of medical equipment in India by Union Territories, %
Such a distribution of market shares in the production of medical equipment across the Union Territories is associated with the concentration of the majority of enterprises producing medical equipment in the Central and Northwestern Federal Districts.
1.5. Assessment of current trends and development prospects of the studied market
Key trends in the medical device manufacturing market include:
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Prospects for the development of the market for advanced training of medical workers:
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1.6. Assessment of factors influencing the market for the production of medical equipment
Let's consider the main factors influencing the market for the production of medical equipment and, accordingly, demand.
Economic forces
Dynamics of India's Gross Domestic Product
The dynamics of GDP is a determining factor in the development of the country's economy, it forms the main trends in consumer effective demand and economic activity.
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Political and legal factors
State support for the medical equipment manufacturing market
The development of the Indian medical device manufacturing market is influenced by:
- the state program ""Development of the pharmaceutical and medical industry"", the purpose of which is to create an innovative Indian pharmaceutical and world-class medical industry;
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The Ministry of Industry and Trade of India, on the basis of draft lists of medical devices formed by the Ministry of Health of India, necessary for the implementation of measures to equip / re-equip, as well as the creation of new profile specialized (oncological and cardiovascular profile) medical centers and departments, analyzed the possibility of participation of domestic enterprises of the medical industry in the implementation national project and lists of Indian medical equipment.
The Government of India temporarily allowed to increase the amount of advance payments on government contracts up to 50%
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The Ministry of Industry and Trade submitted a proposal to change the target for the share of medical devices manufactured in India
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Social factors
Real disposable income of the population
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Population
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COVID-19
The world is experiencing one of the most serious pandemics of modern times: in a matter of months, the new coronavirus (COVID-19) has attacked all countries, in many of them the number of cases has increased or is still growing exponentially.
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Technological factors
According to the Indian Ministry of Industry and Trade, many of the domestic developments have no analogues in the world and can replace foreign medical equipment in such areas as oncology, ophthalmology, hematology, cardiology, cardiovascular surgery and emergency medicine. First of all, these are telemedicine technologies, laser technologies, anesthesia and respiratory devices, equipment for neurosurgery, microsurgery and dentistry, neonatal equipment, devices for ultrasound diagnostics and therapy, mobile blood sampling points, refrigeration equipment for storing and transporting drugs.
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Table 2. STEP analysis of factors influencing the medical device manufacturing market
Macro-environmental factors have both positive and negative impact on the medical device manufacturing market, however, social, political and economic factors have a decisive influence.
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According to the results of the STEP analysis, social, economic and political factors, which have both a negative and a positive impact on the development of the medical equipment manufacturing market, have a decisive influence, however, political factors and the coronavirus pandemic have a greater influence on the market.
1.7. Analysis of sectoral indicators of financial and economic activity
According to GidMarket based on Rosstat data, at the end of 2019. Gross Margin of India's medical device industry was …
Table 3. Gross margin of the medical device industry in comparison with all sectors of the Indian economy, 2015-2019, %
Increase in gross margin during 2015-2019 indicates a decrease in direct costs in the cost of manufacturing medical equipment.
Diagram 9. Current liquidity (total coverage) in the production of medical equipment for 2015-2019
The absolute liquidity ratio shows what proportion of short-term debt obligations will be covered by cash and cash equivalents in the form of marketable securities and deposits, i.е. absolutely liquid assets. For Indian companies, the normative value of the absolute liquidity ratio is within Kal > 0.2-0.5.
Table 5. Absolute liquidity in the medical device industry in comparison with all sectors of the Indian economy, 2015-2019, times
In the medical equipment manufacturing industry in 2015-2016. the absolute liquidity indicator was at the standard level, in 2017-2019. – above the norm, which indicates the irrational structure of the capital of enterprises in the industry, a high proportion of non-performing assets in the form of cash and funds in accounts.
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In general, the analysis of industry financial ratios of the medical device manufacturing industry in India shows a low profit margin before tax, which may be a consequence of high competition in the industry along with high fixed costs. At the same time, indicators of industry values of current and absolute liquidity, financial stability indicate the ability of industry enterprises to repay current debt at the expense of existing current (current) assets.
Part 2: Competitive Analysis in the Medical Device Manufacturing Market in India
2.1. Major players in the market
The largest players in the medical device manufacturing market in India include:
- LLC ""XXX"";
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2.2. Market shares of the largest competitors
Consider the market share of the largest competitor.
The medical device manufacturing market in India is characterized by a low level of concentration (a large number of operators with small market shares).
According to GidMarket, the market leader in the production of medical equipment in India is XXX LLC, which occupies …% of the Indian market in 2019.
Diagram 12. Shares of the largest competitors in the medical equipment manufacturing market in 2019
2.3. Profiles of major players
GE Healthcare, a business unit of GE, manufactures medical devices, infrastructure IT solutions, data analytics systems and decision support tools that help healthcare professionals provide effective diagnosis, treatment and monitoring of patients. It also provides service support for equipment, supply of components, consumables, provides training programs for healthcare professionals and medical consulting.
Produces and provides the following medical equipment and IT solutions:
- magnetic resonance and computed tomography, molecular imaging systems, x-rays, specialized software and services used to diagnose general conditions, women's health, as well as solutions for interventional radiology;
- high-performance ultrasound systems, as well as specialized software and services designed to conduct diagnostic studies, taking into account the needs of a particular clinical situation;
- systems for emergency care and monitoring of the condition of patients, as well as specialized software and services used in diagnostic cardiology to provide anesthesia and perinatal care;
- IT solutions to optimize digital infrastructure, operational and clinical outcomes, aimed at improving the efficiency of medical care and expanding global access to advanced healthcare technologies.
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For the period 2015-2019. the revenues of the five largest operators of the Indian medical equipment manufacturing market increased by …%.
Part 3. Analysis of consumption of medical equipment production
3.1. Estimated per capita consumption of medical equipment production
Estimation of per capita consumption of medical equipment in India was made by GidMarket on the basis of the ratio of the volume of the market for the production of medical equipment to the population of India.
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During the analyzed period, the consumption of medical equipment per capita increased ... per person per year, while the growth occurred mainly due to an increase in prices for medical equipment due to exchange rate differences.
3.2. Market Saturation and Estimated Market Potential in India
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The development of the medical equipment market is now being influenced by the COVID-19 pandemic, according to TASS, Indian enterprises are required to increase the production of medical equipment in …
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3.3. Description of consumer preferences
The main consumers of medical equipment are public medical institutions and private commercial medical organizations.
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3.4. Price analysis
The dynamics of prices for medical equipment is due to the general level of inflation and mainly to the growth of the exchange rate. Indian manufacturers buy imported industrial equipment, as well as components for the production of medical equipment domestically from abroad. Of course, there are enterprises in the medical industry that do not use imported components, but there are not many of them.
Table 12. Average producer prices for electrocardiographs in the Union Territories, Rs./pc.
Part 4. Assessment of factors of investment attractiveness of the market
The most significant negative factors
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The most significant positive factors
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Part 5. Forecast of the development of the market for the production of medical equipment until 2024
We will analyze the market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
The following factors make it possible to predict the dynamics of the market volume for the production of medical equipment:
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GidMarket analysts predict that at current prices the market for the production of medical equipment, taking into account the influence of the above factors, will grow at the level of …% per year …
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Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations to existing market participants
The Indian medical equipment market, like the world market, is characterized by a high potential for growth and development. This is due to the high population of India, the presence of significant public financial resources and the great need to improve and modernize the healthcare system.
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Within the framework of the Scientific and Technical Council for Medical Equipment, an agreement was signed on the formation in India of a Consortium of developers and manufacturers of medical equipment. The goal of creating the Consortium will be the development and production of a line of domestic medical equipment in all key areas: analytical, diagnostic and therapeutic. The decision to establish the Consortium was dictated by the need to localize the most critical types of medical equipment in India.
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According to the results of the STEP analysis, the social, economic and political factors that have both negative and positive influence on the medical device manufacturing market in India, however, the market is influenced to a greater extent by political factors and the COVID-19 pandemic.
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Diagrams
Diagram 1. Dynamics of the market volume of medical equipment and instruments, 2015-2019
Diagram 2. Structure of medical equipment production by types, %
Diagram 3. Structure of the market for the production of medical equipment in India by Union Territories, %
Diagram 4. Dynamics of India's GDP, 2012-2019, % to the previous year
Chart 5. Monthly dynamics of the average monthly exchange rate of the US dollar against the rupee, 2014-2019, Jan-March 2020, Rs. for 1 US dollar
Diagram 6. Dynamics of real disposable income of the population in India, 2012-2019, % to the previous year
Diagram 7. Population dynamics in India, as of 01 Jan. 2012-2020, million people
Diagram 8. Profitability of profit before tax (profit of the reporting period) in the field of medical equipment manufacturing in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 9. Current liquidity (total coverage) in the production of medical equipment for 2015-2019, times
Diagram 10. Business activity (average term of receivables turnover) in the field of medical equipment production, for 2015-2019, days days
Diagram 11. Financial stability (security of own working capital) in the field of medical equipment manufacturing, in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 12. Shares of the largest competitors in the medical equipment manufacturing market in 2019
Diagram 13. Dynamics of the total revenue of the largest participants in the medical equipment manufacturing market (TOP-5) in India, 2015-2019
Diagram 14. The volume of consumption of medical equipment to the population of India, 2015-2019, Rs./person
Diagram 15. Forecast of the volume of the market for the production of medical equipment in 2020 -2024 according to the first scenario (one self-isolation in 2020)
Diagram 16. Forecast of the volume of the market for the production of medical equipment in 2020 -2024 according to the second scenario (two self-isolations in 2020)
Tables
Table 1. Share of Indian medical equipment purchased in 2014-2018
Table 2. STEP analysis of factors influencing the medical device manufacturing market
Table 3. Gross margin of the medical device industry in comparison with all sectors of the Indian economy, 2015-2019, %
Table 4. Absolute liquidity in the medical device industry in comparison with all sectors of the Indian economy, 2015-2019, times
Table 5. Main companies participating in the medical equipment manufacturing market in 2019
Table 6. Basic information about participant No. 1 of the medical equipment manufacturing market
Table 7. Basic information about participant No. 2 of the medical equipment manufacturing market
Table 8. Basic information about participant No. 3 of the medical equipment manufacturing market
Table 9. Basic information about participant No. 4 of the medical equipment manufacturing market
Table 10. Basic information about participant No. 5 of the medical equipment manufacturing market
Table 11. Consumer price indices in the medical equipment manufacturing market in India in 2017-2019 %
Table 12. Average producer prices for electrocardiographs in the Union Territories, Rs./pc.
Table 13. Assessment of factors of investment attractiveness of the market for the production of medical equipment
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