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Business EconomyPosted at: Oct 27 2020 4:30PM


Medical Technology sector likely to recover to pre-COVID levels in H2-2021: MTaI

Kolkata, Oct 27 (UNI) Medical technology sector is expected to recover to the pre-COVID19 level only by June-December 2021 at best as companies continue to earn lower than projected revenue due to weak demand and high cost, Medical Technology Association of India (MTaI) said.
MTaI represents leading research-based medical technology companies with a large footprint in manufacturing and training in the country.
Innovation-led global medical device manufacturers suffered up to 85% drop in revenue in most of the segments during April-June 2020. In the July-September quarter, the decline has slowed a little but the future growth looks constrained due to continuing socio-economic challenges posed by the COVID-19 pandemic, compounded by rising import and operational costs, rupee depreciation against US dollar, and some policy measures that could threaten the viability of Medtech companies.
The financial year 2019-20 dealt severe blows to the medical technology sector in different ways. The first blow came even before COVID-19 which was the 5% ad valorem health cess imposed on imported medical devices. This, coupled with the INR depreciating by almost 7-8%% in March 2020 against the EUR and the USD, meant a very significant hit for the medical technology industry where more than 80% of the products are imported. Then came COVID-19 pandemic along with the nationwide lockdown, and elective surgeries shrank dramatically. Many healthcare workers migrated to their hometowns. Star doctors (who are mostly in their 50s and 60s), who are the magnets for procedures, also became less available in hospital premises due to their vulnerable age. Hospitals got hit because the impact of apportioning part of the beds for COVID facilities was not clearly foreseen on non-COVID procedures. The cost of dedicated COVID corridors and infection control measures hit the hospitals further and their bottom lines shrank. All this meant postponement of capital expenditures and stringent monitoring of inventories. The patient started procedure shopping and the hospitals began reducing their product inventories.
What is on the horizon? Epidemiological experts say that normalcy will return only past June 2021. MTaI Chairman and Director General Mr. Pavan Choudary concurs saying, “Part of the problem is universal, stretching across the globe. Some other part is unique to India – this is the part we would like to draw government’s attention to. The 5% health cess ad valorem imposed on imported medical devices have added to the woes of the industry. Almost all the companies in the industry have heeded to the call given by the prime minister to preserve the jobs and the industry has done so. However, the
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