Is India right destination for medtech outsourcing?


Medtech OEMs are challenged with multiple hurdles in retaining the operations in-house. To list a few; increasing infrastructure cost leading to troublesome capacity scale up, lack of right talent and others. These circumstances are worsened by increased price cuts, reimbursement issues and healthcare reforms. What comes out as the mother of all hurdles is regulatory pressures, that not just consumes money on account of long standing clinical trials but also delays in potential access of medical devices to needy patients.

This all factors push OEMs to seek shelter of all necessary means that help them reduce costs. For all those firms looking to get some reduction in their annual COGS, the most wise thing to do is ” Outsource”. But the million dollar question that arises in this situation is ” Where To, and To Whom”.

The moment cost advantage gets spoken in sourcing fraternity, all eyes go to China. While China has delivered on its cost savings claim, it had its own fall when it came to quality. Numerous pharma manufacturing issues that surfaced over the last 5 years stand testimonial to the above statement. Further 50% labor rate increase on Y-o-Y basis, is slowly diminishing its cheap labor advantage.

Under this scenario, a country which can deliver on the required deliverables is India.

India holds 380 universities, 11200 colleges and 1500 research institutes making it a geography that has 2nd largest man power of scientist and engineer at disposal, globally. This academic engine support is ever growing and can meet outsourcing need of any OEM flagged to any industry, with medtech being no different.

Further a careful analysis of outsourcing partners based out of India highlighted the fact that the country CMOs have gathered enough regulatory and certification knowledge, which is more than sufficient in addressing not just part of operation but overall product life cycle ( As per article from HCL)

Image Source: HCL feature on Opening the doors to india

Further there FDA certified facilities and credibility from ISO and ISO 13485 certification adds a great amount of confidence for the buyers trying to avail the service from the region.

To surmise, country India is ready for tackling more strategic work from developed regions. PM Shri Narendra Modi’s Make In India campaign just goes about highlighting what the country can offer.However final call on the regional vendors must be based on three major checks, which include:

  1. Accountability
  2. Compliance
  3. Regulatory

if the three areas show promising facts around them, medtech OEMs must go forward and leverage the country’s technical know how. This can help companies in focusing their time and resources on more strategic aspects of operation such as R&D, Sales and Marketing.

Key Takeaways:

  1. India is surfacing as pioneer in handling more strategic and quality driven sectors such as Medtech and Pharma.
  2. Outsourcing vendors in the country have learned the international language of quality, compliance and accountability to address their client needs.
  3. A good volume of outstanding projects stand testimonial to their capabilities in medtech sector.




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