The role of the medical devices industry in ensuring business continuity and important deliveries during the pandemic has been critical. Covid-19 has once again brought Indian medtech to the epicentre. The current pandemic has led the medical devices industry to quickly recalibrate across the value chain and serve healthcare’s critical needs. This has further put the medical devices industry at the forefront, with unparalleled demand for products like diagnostic tests, personal protective equipment (PPE), masks, gloves and much more. While the crisis has placed these unparalleled demands, but the industry has responded with resilience and ability to integrate innovations swiftly. In an exclusive conversation with the Financial Express Online Anish Bafna, MD & CEO, The Healthium Group talked about how Healthium Group led the business continuity and responsiveness during the pandemic, given Healthium’s position as a leading medical devices manufacturer in India and other 80 geographies. Excerpts:
Elective surgeries have gone down immensely, since Healthium’s major business is surgicals, how are you managing the business now?
The last year with the 1st wave has been both unprecedented and unpredictable. Elective surgeries had dropped very sharply in the first 4 months, hospital walk-ins reduced initially and the industry and market de-grew overall. Healthium has however registered a double digit growth and has been able to keep our business trajectory intact. This is largely due to strong measures put in early to ensure business continuity to serve our customers, and ensuring adequate safety protocols for our employees.
- A strong state of preparedness and agility in serving our customers without disruptions even during the Lockdowns: When we heard of the effects in China, we ensured that we had adequate stock of raw materials for the next few months, we were amongst the 1st to keep our plants open with due safety pre-cautions, we ensured that our warehouses and depots were well stocked to ensure continuous supply of essential medical devices to hospitals and our sales teams were amongst the 1st to be on the ground as early as May to serve our customers.
- Our well diversified portfolio and sources of business: While elective surgeries dipped, emergency surgeries like Cardio-vascular surgeries and childbirth continued .We ensured adequate product availability to serve our customers in these segments whenever they needed help even during Lockdown. While Tier1 markets may have slowed, the market reality in Tier2,3 and 4 cities was very different. It was business as usual with crowded OPD and surgeries. We consolidated our leadership and our strong distribution in these cities and worked closely with hospitals and nursing homes to ensure education on COVID appropriate protocols in OPDs and OTs with “Safe surgeries saves lives” campaign .These segments also contributed to our growth.
- Slew of new product launches and growth in exports: Despite international freight charges skyrocketing, we took the hit and served our international customers too in a timely manner and this helped us build strong equity and grow our exports. We also invested heavily in R & D to bring in a slew of new products, over 1 product, every quarter including 1st of its kind Trushield anti-microbial gloves that protects both surgeons and patients against Hospital acquired infection and SSI by actively killing microbes, Surestitch the 1st meniscal repair gun manufactured in India etc.
This combined with strong cash flow management enabled us to tide through ahead of the curve.
In the second wave too, we have taken several measures to ensure we support the frontline Healthcare practitioners. This combined with the host of new products we plan to bring in, our vast coverage network of 18000 geo tagged hospitals in India , strong focus on partnering with large hospitals in Tier 1 and consolidating market Leadership in Tier3,4,5, we hope, will help us steer towards a good 2021.
Do you think medical devices and consumables industry has evolved in the last two years considering the major reports have stated otherwise?
Medtech industry has been one of the key contributors to the healthcare ecosystem even before the pandemic. However, the unprecedented situation has brought the sector to the fore due to the healthcare systems’ reliance on it in fighting the pandemic. 2020 has been a challenging year for the MedTech industry, with drop in electives and hospital footfalls especially in the early stages of the pandemic. However, the pandemic has also provided means to strengthen the healthcare industry with opportunities for innovation and cost efficiencies. The early demands on the medical devices and consumables sector for masks, PPE kits, Testing kits, ventilators, gloves, anti-microbials has been met with the industry rising to the occasion and matching the needs of the country.
The pandemic has also certainly thrown open the need to create a far robust medtech infrastructure. There has been an over reliance on imported medical devices and consumables with 75 to 80% devices being imported, the supply chain infrastructure needs greater resilience, manufacturing is very fragmented and there is a strong need to create access to high quality, high precision medical devices in the country. While a humanitarian crisis of this scale cannot be seen as a profiteering opportunity, it has definitely added the much-needed tailwind for the sector to be recognised for its importance and be positioned in the right light.
How are you supporting the healthcare fraternity as an essential service provider? How are you overcoming the challenges to meet the current demand of medical devices and consumables?
The healthcare industry has been at the forefront of the battle against COVID and our team has been working hard to support them. We have ramped up production of essential medical devices and kept our manufacturing facilities open with due permissions and precautions, despite the lockdown, to ensure un-interrupted supply to hospitals.
We have fast tracked production schedules to enable critical deliveries within 24-48 hours. We have expanded our supply chain by 40% to support quicker deliveries to healthcare facilities in remote parts of the country. We are aware that childbirth and emergency surgeries like cardio -vascular surgeries still continue despite the pandemic and have ensured that critical products are in enough supply.
While the pandemic has brought new challenges to the industry, it has also provided means to strengthen the healthcare industry with opportunities for innovation. Healthium has continued to invest heavily in R&D and on new product development even during the pandemic.
The last 2 years for Healthium have been a transformational journey on quality, products, processes, technology and people and as a result we are today largest maker of suture needles globally with 1 in 6 surgeries using our product. We are the 4th largest suture manufacturer globally accounting for over 50% of India’s suture exports. We currently have access to 18,000 hospitals pan India. In India, Healthium is present in 500 districts which have medical facilities and providing the last mile support of essential healthcare services to patients across the country.
Healthium is supplying its products to 80 countries globally supporting the agenda of “Make in India and for the World”. We are the only company to have a 510K (USFDA) approval in this part of the world. We also have C.E and ISO quality approvals.
It is our endeavour to create high quality Indian alternatives to MNCs. We have invested heavily in R & D and in our research centre at Noida. Our aim is to be partners for the leading hospitals in the country to ensure easy accessibility of quality medical devices for better patient outcomes. We aim to solidify our position in Tier 1 cities and use our proven industry credentials and strong legacy to partner with key hospital networks, drive accelerated growth and offer consumers more choices.
During the last and current wave, manufacturing workforce has struggled to keep up with the jobs? How have you addressed this issue at your facilities?
COVID-19 has created disruptions in lives, livelihoods and ways of working, and disrupted our personal and professional wellbeing.
As a responsible medtech company and an essential service provider, our focus has always been on the safety, physical, mental and equally important, on the financial wellbeing of our employees and teams at the plants. Our teams have been instrumental in helping us serve the healthcare practitioners and frontline workers without disruption.
We have therefore ensured that there is not even a single job cut at Healthium since last year. In fact, we have not only paid salaries on time, but also paid increments, bonuses, variable pay, to ensure we motivate and support our teams.
Keeping in mind financial security is paramount during these uncertain times, the company has not only ensured that ESI, COVID insurance, Life covers for its employees are in place but has also announced bereavement allowance of Rs 20 Lakhs to the family of the bereaved in case of the unfortunate loss of life on an employee due to COVID. The company will also ensure EDLI upto Rs 7 Lakhs and other welfare measures like reimbursement of costs of vaccine, RT-PCR tests, scans and blood marker tests.
It has also conducted the inoculation drive for workers and their families. At all times, we continue to reach out to the afflicted employees and their families to ensure they are well supported.
We also spent the last wave strongly outlining measures to ensure safety for our employees and teams working at our plants. While physical precautions like social distancing, thermal checks, on-site medical support, provision of masks, gloves, sanitizers, logistics support on transport, alternate shifts were being managed, mental health and anxiety of the teams and their families also became key concerns. Counselling for families, no salary cuts, incentives for workers were all undertaken to ensure that the team felt safe in all ways.
What is your take on the recent GST relaxation on medical devices? Do you think it will benefit the industry in the short term and longer run?
The recent rebate has been only on the COVID related medical devices. The current landscape needs to address the lopsided GST tax structure if the dream of an Atmanirbhar Bharat needs to be truly realised. Over the years, import duties on medical devices are lower than those on the raw materials that goes into the making of these medical devices. Ever since the introduction of GST, imported medical devices have become cheaper. This has made importing raw materials and medical devices far cheaper than local manufacture and a change in tax structure will certainly help in the much needed boost to local manufacturing.
Supply chain has been a major challenge for essential businesses. How are you managing to keep it operational during the pandemic?
The distribution prowess of the large scale manufacturers in medical devices and consumables today depends on the local market dynamics, hence localisation becomes an essential aspect to provide last mile delivery. Customer demands and the resulting pressure on the supply chain varies tremendously in terms of products, clinical needs, varied geographical regions and the penetrating power of local suppliers. Therefore, identifying the most suitable distributors and suppliers that meet requirements, is the key to success.
We have expanded our Supply chain by 40% since the pandemic so that we can overcome logistics hurdles to ensure smooth flow of essential medical devices and consumables to our clients including those in remote parts of the country. We have also expanded our depots, C&F agents, warehouses to ensure, our network of 18000 hospitals across 500 districts in India, is well covered.
Government’s recent focus on ‘Make in India’ has progressed immensely in medical devices manufacturing. Do you think it will be feasible for medical devices industry considering the huge import dependency on raw material as well as devices?
The Medical Devices industry has been recognised as the sunshine sector by the government, however the reality to achieve this status is still a long way. The current import dependence stands at 75-80% with exports limited to US$2.1 billion as of 2019. This clearly indicates a huge opportunity for the home-grown players to turn the tide in order to gain equivalent status as the pharmaceutical industry.
Some factors that could help include:-
∙ Support / Incentives from Government:
- Benefits to local manufacturers in government/public tenders and for procurement in public hospitals: For e.g. price benefit of 10-15% versus any foreign company which does not manufacture in the home country. For e.g. countries like Turkey, Sri Lanka, South Africa, China etc. have such measures in place.
- Export incentives: Several governments through taxation and other means incentivise the export of medical devices from their countries. Examples of such incentives include GST waivers, import duty waivers on RM related to exports, tax rebates etc.
∙ Increase competitiveness / innovation:
- While local government aiding the sales of domestic companies is extremely helpful, there is also a responsibility to develop companies which manufacture products which are high-quality as well as affordable. For helping with the same, governments in developing nations (e.g. China, Mexico) have been providing support on the R&D / innovation related expenses of medical device companies to boost development of innovative, high-quality and cost-competitive medical devices.
- Building large medical device tech parks which can become hubs of manufacturing in the country and potentially export hubs to the world like India has become in Pharma.
Such measures can go a long way in hastening the realities of creating an Atmanirbhar Bharat.
As an Indian player delivering to global standards with US FDA (510K), CE and ISO approval, we are working relentlessly to reduce the dependence on imported technology and support a self-reliant India. A trusted partner to the healthcare industry, Healthium has created over 55 patented products in India and the U.S, and garnered access to 18,000 hospitals in India and 80+ countries to deliver high precision, high quality products.