* GE, Siemens, Philips focusing on medical products for
* India strategy seen as springboard for emerging markets
* India medical devices market growing at +10 pct a yr -
By Rina Chandran
BANGALORE, July 5 In a sleek glass and chrome
building in Bangalore's software hub, the more than 1,000 young
researchers and engineers at GE Healthcare could hold the keys
to innovations that save lives in India's vast hinterland.
The 50,000-sq. ft. R&D facility, GE Healthcare's largest,
recently launched the MACi, a portable electrocardiogram (ECG)
machine that weighs less than 1 kilo and runs on a battery even
in hot, dusty conditions, enabling ECGs at just $0.20 each
compared with around $50 currently.
The MACi, and its slightly heavier predecessor MAC 400,
were designed, developed and manufactured with local components
in India, where greater healthcare spending is boosting medical
systems makers like GE (GE.N), which are now focusing on making
products for India.
The market for medical devices is worth up to $3 billion
and growing at more than 10 percent a year, according to
PriceWaterhouseCoopers (PWC), drawing foreign firms such as GE
Healthcare, a venture with India's Wipro (WIPR.BO), Siemens
(SIEGn.DE) and Philips (PHG.AS), which are also pursuing a
local-for-local strategy in India.
"In theory, the opportunity is huge," says Sujay Shetty,
leader of the pharma practice at PWC in India.
"In India we want first-world technology at third-world
prices. So India can also be a springboard for Africa and Latin
America, which have similar needs," he said.
India's healthcare industry, estimated at more than $30
billion, will double in value in five years, according to PWC.
Graphic on India's expenditure on health:
GE Healthcare first assembled high-end ultrasound, CT and
X-ray machines and adopted an "in country, for country" policy
earlier this year at its sprawling John F. Welch Technology
Centre in Bangalore, with a staff of 2,200 focused on India.
"So far, innovations were geared toward the United States
and Europe and artificially pushed into the Indian market,"
said Ashish Shah, general manager, GE Healthcare's global
"Today, we innovate for India in India, thinking in rupees
and paise rather than dollars and cents," said Shah, who took
on this job after more than 15 years with GE Healthcare in the
CARE ON WHEELS
India spends just over 5 percent of its $1-trillion-GDP
annually, largely in primary healthcare focusing on basic needs
such as immunisations and common illnesses.
The per capita expenditure is less than a third of what
China spends, while the private sector accounts for about 80
percent of total spending in India's healthcare.
India is an emerging medical tourism destination, with
modern hospitals in cities offering premium care at prices that
are a fraction of those in the west, but it has just 0.7
hospital beds and 0.6 doctors per 1,000 people, well below the
The government has launched a National Rural Health Mission
and an insurance scheme for the very poor, and is encouraging
public-private partnerships (PPP), particularly in small towns,
where people have to travel long distances for blood tests and
Traditionally, NGOs and large corporations have partnered
hospitals or aid agencies in rural areas, helping bridge the
One example is Lifeline Express, comprising five carriages
on a train, kitted out with facilities including an operation
theatre. Backed by UK charity Impact Foundation, it has
performed more than 600,000 surgeries in nearly 20 years.
Now, medical systems makers like GE Healthcare and Siemens,
who have for years sold high-end equipment to local hospital
chains such as Apollo (APLH.BO), Fortis Healthcare (FOHE.BO)
and Max (MAXI.BO), are keen to tap this opportunity, as well.
Siemens, which has manufactured imaging and ultrasound
systems in India for more than 50 years, has built mobile
diagnostics units with X-ray, ultrasound and pathology systems.
The PPP model would work to take quality healthcare to the
masses, but there is no framework yet, plus there is no
national policy or fiscal incentives for local manufacture,
said D. Ragavan, executive vice president at Siemens
GE has a pilot CathLab on Wheels, which a leading cardiac
surgeon and the Indian Army helped build. In two-and-a-half
years it has served about 2,500 patients, performing routine
exams and complex angiographies, all in a space no bigger than
"We can't survive in an emerging market like India selling
what we make in developed markets because there's a huge
dichotomy between the need for healthcare and ability to pay,"
said V. Raja, chief executive of GE Healthcare in south Asia.
NO BELLS AND WHISTLES
This is the gap GE's MAC 400 and MACi seek to bridge: Heart
disease is a leading cause of death in India, and with these
ultra portable devices, ECG testing -- the first step in early
detection -- is made affordable and accessible to millions.
The MAC 400 costs about $1,000, or one-third the price of
an imported equivalent, and has sold more than 8,000 units
since its launch in 2008. The MACi, smaller and lighter, costs
There are some 700 medical devices makers in India, but
most make low-value products such as needles and catheters,
leaving specialist products to foreign firms like GE, who are
considering taking their in country-for country policy to other
GE has also built baby warmers for India where infant
mortality is high, more than halving costs with local
components and fewer features.
"For something to work in India you don't need all the bells
and whistles," said Raja, picking up a MACi, which is no bigger
than a credit card scanner and has fewer buttons.
The strategy has opened up a bigger market, he said,
backing the "fortune at the bottom of the pyramid" theory that
there is money to be made even among poorer consumers, which
companies from Nokia NOK1V.HE to Nestle NESN.VX have
Healthcare infrastructure expenditure in India in 2013 will
hit $14.2 billion, a recent KPMG report estimated, a near 50
percent increase of the 2006 total, helped by new technologies,
the growth of hospital chains and increased government
GE Healthcare, Siemens, Philips and others are ready.
"We are at an inflection point and have the opportunity to
do what telecom did: grow exponentially by addressing a mass
need with the right quality products at the right price," Raja
(Editing by Alistair Scrutton and Dhara Ranasinghe)