October 2013

Indian Medical Technology Industry

Strictly Private and Confidential

3 October 2013

www.pwc.com

1 Indian Medical Technology Industry 1

2 Trends Driving Growth in Indian Medical Technology Industry 4

3 Indian Medical Technology Industry : The Future 11

Page Section Overview

Table of Contents

PwC

3 October 2013

Section 1 Indian Medical Technology Industry

1

Indian Medical Technology Industry October 2013

PwC

3 October 2013

India Medtech market is poised for major growth

India Medtech Market Growth1

23 out of the 25 top medical device firms have established at a minimum a direct sales and marketing presence in India

Higher-end medical devices such as orthopedics and other implantables are projected to grow at 19% CAGR until 20152

1. PRTM Emerging Markets Supply Chain Survey, MDISCC 2011 2. EPSICOM India Medical Device Report, 2010

$890 $1,188

$1,444 $1,626 $1,904

$1,988

$2,320 $2,695

$3,135

$3,650

$4,245

$4,844

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sale

s (

$M

)

Consumables Diagnostic Imaging Dental Products Orthopaedics & Implantables Others

Plans to gain more share of the Indian health care market and take advantage of the country's patient pay-based

health care system Medtronic CEO

16% CAGR

(forecast)

18% CAGR (actual)

2

Indian Medical Technology Industry October 2013

Section 1 Indian Medical Technology Industry

PwC

3 October 2013

India Medtech growth Top three major trends driving growth projections

1 2 3 4 5

Governmnet subsidies/tax breaks

Better IP protection

Introduction of new low cost products

Increased awareness about products

Penetration into rural markets

Increased Government healthcare spending

Stable regulatory enironments

Improvement in healthcare inf rastructure

Increasing health insurance coverage

Rapidly growing middle class

Average Companies Score

India Medtech Growth Trends1

Least Likely Most Likely

3

Indian Medical Technology Industry October 2013

Section 1 Indian Medical Technology Industry

PwC

3 October 2013

Section 2 Trends Driving Growth in Indian Medical Technology Industry

4

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Regulation Financing Innovation

Collaboration Investments

Medical Technology Growth is driven by profound changes in the Industry Environment in India

5

Section 2 Trends Driving Growth in Indian Medical Technology Industry

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Regulation

Regulatory Authority

FDI Clinical Trials

Pricing Compliance

Regulatory Environment is Seeing Major Changes which will Impact the Medical Technology Industry

6

Section 2 Trends Driving Growth in Indian Medical Technology Industry

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Financing

Government Health

Insurance

RSBY, State Government

Social Insurance

CGHS, ESIC

Private Health

Insurance

Individual, Group

Employer Provided

Railways, Armed Forces

A range of Healthcare Financing Mechanisms are Contributing to the Growth of the Medical Technology Industry

7

Section 2 Trends Driving Growth in Indian Medical Technology Industry

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Innovation

Product

Low Cost Breakthrough

Business Model

PPP

Medical Technology Industry in India is characterized by Innovation across both Product and Business Model dimensions

8

Section 2 Trends Driving Growth in Indian Medical Technology Industry

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Collaboration

Industry-Academics

Industry-Research

Industry-Industry

New collaboration Models are emerging to aid Medical Technology Innovation in India

9

Section 2 Trends Driving Growth in Indian Medical Technology Industry

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Investments

Strategic

R&D Manufacturing Channels

Private Equity

Established Startups

Indian Medical Technology Industry is seeing surge in Investments from both Strategic Investors and Private Equity Funds

10

Section 2 Trends Driving Growth in Indian Medical Technology Industry

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Section 3 Indian Medical Technology Industry : The Future

11

Indian Medical Technology Industry October 2013

PwC

3 October 2013

Companies That develop operational capabilities to drive India specific product and business model innovation are better positioned to win

Establish a Low-cost Manufacturing Network

1

Customize Commercial Operations

3

Establish India Specific R&D Operations

2

Allows to compete on price Enable companies to penetrate all

market segments Combines local strengths with global

model

Focus on creating market appropriate products for India (and other emerging markets)

Align India R&D with global R&D operating model

Evolving healthcare ecosystem requires entrepreneurial approach to commercialization

Entering new market segments in India will require redesign of commercial operations

12

Indian Medical Technology Industry October 2013

Section 3 Indian Medical Technology Industry : The Future

2013 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers Private Limited (a limited liability company in India), which

is a member firm of PricewaterhouseCoopers International Limited, each member firm of

which is a separate legal entity.

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