The pandemic has reiterated the role of diagnostics in the preventive healthcare mechanism. More importantly, the application of molecular diagnostics in diagnosing diseases has gained momentum due to the pandemic.
However, being an import-dominated segment, it has become a persistent challenge for IVD companies to scale up manufacturing to meet the rising demand for IVD test kits. The supply shortage has made quite a strong case for the IVD sector to become Atmanirbhar or self-reliant. However, to help the IVD sector become self-reliant so that it continues to play a critical role in the fight against Covid-19, the government should develop a favourable regulatory framework to spur product and technology development and commercialization of those solutions. The IVD sector wants policy certainty to initiate its journey towards becoming self-sufficient.
Achieving complete self-reliance in the manufacture of IVD solutions is the need of the hour. A self-reliant IVD segment will not only be able to meet the domestic demand but also increase its share in the global market. The irregular supply of imports due to pandemic-induced operational disruptions brought to the fore the need to develop a robust IVD manufacturing base in the country. And to develop that kind of manufacturing set up, the companies need to initiate the development of home-grown technologies.
The introduction of the Production Linked Incentive (PLI) scheme for the healthcare industry is a welcome measure by the government to help the IVD segment become self-reliant. It will strengthen the manufacturing competencies in the diagnostics industry by encouraging localization of the manufacturing supply chain and technology integration. Setting up of medical device parks will also promote indigenous manufacturing of diagnostics solutions and machineries. Indigenous development of technologies and machineries are crucial, as importing capital-intensive machineries is quite expensive. The government must incentivize domestic manufacturing of these technologies to bring in cost-competitiveness.
The ultimate goal of policy support from the government is to help the IVD manufacturers to achieve economies of scale. The government must offer tax incentives, infrastructure support so that the IVD companies can direct their capital expenditure towards product development and technology integration. More medical device parks need to be developed to expand the IVD manufacturing base in India. A self-reliant eco-system will help the country become a prominent IVD player in the global supply chain.
As per various estimates, India fulfills almost 85 per cent of the domestic demand for medical devices through imports. Higher import dependence prevents the healthcare eco-system from offering cost-effective diagnostic and healthcare solutions. Indigenously developed IVD solutions can reverse the trend.
The Union Budget FY 2021-22 has allocated more than Rs.64,000 crore for the healthcare sector with an aim to boost capacities. The government must channelize the budgetary allocation properly to facilitate domestic manufacturing of diagnostic solutions to further fortify preventive healthcare infrastructure. Making the IVD segment self-reliant is an important step towards boosting the healthcare ecosystem at one hand and strengthening India’s position in the global diagnostic supply chain, on the other hand.
Dr Veeraal Gandhi is Chairman & Managing Director at Voxtur Bio Ltd.
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