Peter Blair Henry, dean of the NYU Stern School of Business, recently published a book titled, Turnaround: Third World Lessons for First World Growth, that got a fair amount of media attention. His thesis is that emerging economies are applying economic policies nurtured in the developed economies and prospering in the process. Meanwhile, western economies have lost their moorings, and are suffering as a consequence. The book has gotten mixed reviews, but it did start me thinking about other lessons that emerging economies can teach us, specifically in the medical technology space. I bounced the idea off Gunjan Bagla, founder and CEO of Amritt Inc., a global innovation consultancy that has worked with the likes of Covidien, Becton Dickinson, J&J and Roche Diagnostics. He will be speaking at MD&M East during the Globalization, Compliance and Commercialization track. He agrees that emerging markets are rife with teachable moments.
Frugal engineering entered the popular lexicon a few years back after Carlos Ghosn, the head of Renault and Nissan, described it as “achieving more with fewer resources.” Rather than stripping down technologies imported from western economies to make them affordable in the developing world, the idea is to design products that serve the needs of a specific population while avoiding needless costs. The Nano car from Tata Motors is one example. GE Healthcare has been a poster child for this movement in the healthcare space since it launched a low-cost portable electrocardiogram in 2008. Its R&D centre in India plans to roll out 20 new healthcare products this year, according to the Financial Times. In the process, GE Healthcare also discovered a ready market for these low-cost innovations in advanced economies, where healthcare budgets are going under the knife.
It’s about time for this conceptual shift, says Bagla. The notion that you can solve healthcare problems in emerging economies by “stripping down so-called perfect western products to good-enough products is a primitive way of dealing with the needs [of those populations]. Breakthrough innovators in the medical device sector need to think of how to address the needs of 4 billion people rather than the top 1 billion or so by income. This often requires revolutionary design, manufacturing, use models and distribution processes. What could be more exciting and fertile ground for a true innovator?” asks Bagla.
Bagla cites the Lullaby Warmer developed at GE Healthcare’s Bangalore facility as one recent made-in-India success story that transcends national borders. The neonatal bed with an overhead heater “was conceived and manufactured to respond to conditions in India,” says Bagla. “But the device has turned out to be quite popular in modern European hospitals.” The device is not available—tellingly?—in the United States.
Where telemedicine fulfills its promise
In countries such as India with challenging geographies and an underdeveloped healthcare infrastructure, telemedicine may find it easier to gain traction than in the western world. “Inventors in the United States are often stifled by concerns of legal liabilty and restrictions on the practice of medicine across state or national boundaries,” notes Bagla. “But knowledge knows no boundaries and today telemedicine is being embraced in emerging economies.” The technology allows the government to leapfrog the hugely expensive option of building hospitals or having practitioners spend days travelling by allowing healthcare providers to connect with patients remotely. “Eventually, some of the innovations [pioneered in emerging economies] will make it past the thicket of lawyers, regulations and third party processes,” says Bagla.
Access to affordable healthcare is not just a life-or-death issue in emerging economies. As Gopi Katragadda, Managing Director, GE India Technology Center, writes on the Forbes India blog:
“I spent quality time in the recent weeks with a small working group developing an understanding of affordable healthcare. I was surprised to learn that affordable healthcare is a significant problem not only in emerging economies but in the western world, as well. In the United States, as an example, 27% of the population has serious problems paying their medical bills.”
The time is ripe—some might say urgent—to rethink the parameters of medtech innovation. In some respects, we might start by asking, what would India do?
MD&M East in Philadelphia will feature an overview of the global medical technology landscape in terms of compliance and commercialisation as part of its conference programme. Bagla will be among the featured speakers at the session on 19 June 2013. The MD&M East conference runs from 17 to 20 June; the exhibition starts a day later on 18 June.