Why did you get into this business of manufacturing sophisticated medical devices such as the pacemaker?
My background is in the devices space. A few years ago, I was looking at where to next deploy my energies and where I could make a bigger impact. Technology has made a very huge impact on the society in India. I am quite fascinated with what Indian pharmaceutical companies have done in making medicines affordable for the emerging markets. The model here was ‘can we replicate what pharmaceutical companies have done in the medical devices space to improve the quality of people and make it a viable business.
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| Dinesh Puri MediVed Innovations On medical devices |
The thought came about three years ago. When I studied the medical devices landscape further, I found that 90percent of the medical devices industry is controlled by the western world–US and Western Europe. It was even more interesting that 90percent of their revenues came from the western world. So I thought that how can you have people who live outside the western world consuming less than 10percent of these devices. In the case of pacemakers, the penetration level in the US is about a 1,000 per million population, and Western Europe has 1,300 per million. In India'scase of it is just 15 per million. In China it is 50 per million. This was the motivation to get into the field of medical devices.
Did you start from scratch or did you acquire a firm?
We couldn’t have developed a new device from scratch because the regulatory approvals in this space are quite cumbersome. By the time you do lab studies and animal studies, etc, it takes six to seven years before your device is ready for the market. We acquired the business of a South American company. They have been in this business for the last 30 years. The manufacturing facility in Bangalore got commissioned in 2009. That’s how MediVed came about.
There are a lot of processes that go into manufacturing a pacemaker. How much time does it take to manufacture it?
There are single-chamber pacemakers and duel-chamber pacemakers. Then there are pacemakers with rate response and without rate response. Rate response means that when a patient with a pacemaker indulges in physical activity such as running or walking upstairs, his heart needs to beat faster. A rate responsive pacemaker senses activity and automatically adjusts the heartbeat. What makes them sophisticated is that various sciences go into it—microelectronics, micro-engineering, polymerization, laser welding, etc. The pacemaker is almost a computer. It has a chip inside it. Several things have to be looked into like battery life, no leakages, etc. Each pacemaker goes through 75-80 manufacturing operations and an automated test protocol. It is tested four times during the manufacturing cycle.
How are the pacemakers that you make, cheaper compared to those manufactured by global players?
In the US, these devices sell for $4,000-8,000. In India, we sell them between $1,000-2,000. It is a fact that many of these western companies also sell at lower prices than in the US. Our focus is to make the devices more relevant for our markets. In the US, everything is paid for by insurance. So people replace the devices every four to five years. In India, we are not used to that; we want the device to last for much longer time. In most emerging markets, 80percent of our healthcare is paid for by the patient. In our markets, we will have to find our own solutions.
How do you manage to reduce the manufacturing cost?
One is because of the value addition that we do while manufacturing. Our cost of a factory operator is one-sixth of that of a US operator. The second part is that there is a significant amount of innovation that you can do in device engineering. Design to cost is a very significant element of high-tech manufacturing discipline. We have done some very considerable innovations in being able to refine the manufacturing engineering technology. All this with the very core principle that there would be no deviation in quality.
How difficult is it to be able to get the right talent for manufacturing medical devices?
India has a phenomenal base for manufacturing skills. There is a very good ecosystem available here for many technologies. India has a very good talent pool. If you are hiring factory operators to work under sophisticated microscopes, you have to have the right ability to hire for skill sets. We do that. We have stringent training processes and operator qualification processes.
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