Medical technology start-ups can enter the public procurement system by innovating the existing government procurement process and by leveraging global best practices.
By Ayesha Chaudhary & Balram Bhargava
India’s innovation and start-up ecosystem has seen tremendous growth in the healthcare sector, especially over the last 7-10 years. The Department of Biotechnology’s initiatives—the School of International Biodesign and the Biotechnology Industry Research Assistance Council (BIRAC)—have resulted in the creation of 300-plus healthcare start-ups. The innovation and entrepreneurial drive has further been accelerated by Start-up India and Atal Innovation Mission.
With these initiatives, a huge amount of public money is being pumped into early-stage technology creation, making India the second-largest start-up destination. However, it is imperative that clinical/user need be clearly articulated before these start-ups are funded to minimise overuse of redundant technology.
Over the past few decades, manufacturing has evolved from a labour-intensive set of mechanical processes into a sophisticated set of advanced smart manufacturing, leading to what is being called as the Fourth Industrial Revolution. The fab lab maker movement is paving way towards advanced manufacturing. The fab lab concept was first introduced by MIT’s professor Neil Gershenfeld. These are modern-day garages, empowered by low-cost and rapid prototyping tools such as 3D printers, CNC machines, injection moulding, laser cutters, computer-controlled milling machines and so on. They harness both physical and digital worlds, and are globally creating a culture of ‘manufacture your own’ product.
Over the last 3-4 years in particular, India has also been catching up with the maker movement. Medical device start-ups are beginning to partner with fab labs, to catalyse their product development and pilot manufacturing. It is a huge opportunity for the government of India to create an institutional framework, by potentially investing in world-class fab labs, which can evolve into mini-factories of manufacturing. The government should follow a public-private partnership model to democratise high-end manufacturing by inviting large corporations to establish dedicated manufacturing hubs in India, thereby enabling start-ups to transition from early stage to growth stage, and supporting the Make-in-India movement.
To further accelerate the scale up of medical device start-ups, the Department of Health Research, ministry of health and family welfare, has established the Medical Technology Assessment Board (MTAB), a central agency for undertaking health technology assessment (HTA) studies, for innovative medical device technologies in India, though the Indian Council of Medical Research. HTA is an international gold standard to assess economic viability, scalability and sustainability of new innovations for public health. HTA includes studies on clinical effectiveness, cost-effectiveness, social and ethical feasibility, and enables a more transparent, inclusive and evidence-based decision-making. The new innovative technologies that successfully qualify HTA may be recommended for bulk public procurement.
Although favourable policy shifts have been introduced in the last three years—to enable domestically-manufactured technologies to participate in public procurement—the uptake of innovative technologies still remains a challenge. It requires moving away from ‘price-only’ based procurement to a more holistic ‘value-based’ approach. The United Nations follows ‘best value for money’ as one of its key guiding principles for bulk procurement, instead of a price-only model. Value-based procurement takes into account life-cycle costs and looks at the health outcomes and overall efficiencies at the system level, which can be obtained from HTA studies. Additionally, the European Union recently launched its new directive on medical device procurement, and this involves smart procurement process—the most economically advantageous tender (MEAT)—involving procurement based on quality, product life-cycle cost, best price-quality ratio and broader socio-economic considerations.
India must learn from such global best practices of democratising high-end manufacturing and procurement based on a value-based model, and thereby establish a specialised national task force to drive centralised bulk public procurement to address high priority public health needs, and ensure optimal usage of medical devices. This will also enable the central government to become the first buyer for high-priority medical devices, creating a smooth pathway for their scale up. It is time to adopt bold and disruptive approaches and contribute towards the development of a new India.
Dr Chaudhary is member, Atal Innovation Mission, NITI Aayog. Dr Bhargava is director general, Indian Council of Medical Research. Views are personal