You’ve probably heard of Sand Hill Road, home to Silicon Valley’s venture capitalists, who changed the way the tech industry did business. You probably haven’t heard of New Delhi’s MedTech Row, but the innovators and entrepreneurs who work here are no less ambitious in attempting to transform the health care industry.
Not far from the historic Qutab Minar monument in the Indian capital, a whole ecosystem of health and medical technology innovators and entrepreneurs specializing in “affordable health care” has sprung up. These newcomers are focused on developing technology to provide better health care to poor people and those with limited access to medical services, while, for the most part, making a profit at the same time.
“India is a hotbed of innovation,” said Elizabeth Bailey, director of the Consortium for Affordable Medical Technologies, or CAMTech, in a phone interview from Boston. The consortium is planning to set up an “innovation laboratory” to test low-cost medical technology on MedTech Row.
CAMTech’s members include the Massachusetts General Hospital, Harvard Medical School, the Medical Electronic Device Realization Center at M.I.T. and Indian research foundations like the Lata Medical Research Foundation and the Vellore Institute of Technology. The aim, Ms. Bailey said, is to find low-cost solutions in collaboration with the people who need them the most. “Ultimately, we would like to help health workers to work smarter and harder,” Ms. Bailey said.
MedTech Row is defined geographically by an enclave of the Qutub Institutional Area, which borders the Indian Institute of Technology’s biomedical engineering department to the south and the All India Institute of Medical Sciences to the north. Between these venerable Indian institutions, several companies and partnerships have their offices clustered around Jawaharlal Nehru University’s campus, with their focal point the offices of the government’s Department of Science and Technology.
This is the area where the nonprofit health giants like Program for Appropriate Technology in Health, or PATH, Public Health Foundation, the Michael and Susan Dell Foundation and the Bill and Melinda Gates Foundation have offices.
Partnerships and for-profit companies have also set up shop here. For example, the All India Institute of Medical Sciences, which is likely to be the final testing ground of most of MedTech Row’s innovations, is currently also home to the Stanford India Biodesign program, a collaboration of the institute, Stanford University and Delhi’s I.I.T. The program is training a new generation of Indian medical technology innovators between Stanford and New Delhi. And the Silicon Valley venture capital firm Sequoia Capital has an office here.
Kevin Frayer/Associated Press
A healthcare worker running a test on a tuberculosis patient in New Delhi, in this Oct. 19, 2012 file photo. The program against drug-resistant tuberculosis saw the use of innovative technology, developed by private companies in partnership with aid groups and the government.
This new focus on low-cost health care should come as no surprise, given the size and growth of the market. Private sector annual revenues in “affordable health care” are estimated at upto $20 billion in India alone, according to Jasjit Mangat, director of investment at Omidyar Network, the philanthropic investment fund of the eBay founder Pierre Omidyar.
That figure is a fraction of India’s total $105 billion in estimated health care industry revenues, including water, sanitation, drugs and health insurance.
In 2011, Fitch Ratings projected that India’s health care industry will double to $100 billion by 2015, thanks to an increasing population, lifestyle-related diseases, growing incomes, greater penetration of insurance and medical tourism. So it isn’t surprising that new health and medical start-ups are popping up in every part of India.
Med-tech parks are also springing up in Tamil Nadu, Andhra Pradesh and Karnataka, and there are a host of innovation labs and training centers for entrepreneurs and community health workers in various stages of development.
But in northern India, it is here, on MedTech Row where the buzz is the loudest, thanks to the concentration of government, private, nonprofit and for-profit entrepreneurial partnerships. Suddenly, it seems you can’t go to a social gathering in New Delhi today without bumping into an affordable health care or public health professional.
The affordable health care sector has caught the interest of every category of financier – from angel investors to commercial venture capital companies to philanthropic or “social venture” capitalists – who are looking at the entire spectrum of developments in the industry, from medical devices to the delivery of low-cost health care.
“We’re very bullish about this sector,” said Ritesh Banglani, director of Helion Ventures Partners, a $605 million India-focused venture fund that has offices in Gurgaon and Bangalore. The fund is particularly interested in specialist outpatient consulting and emergency care for low-income consumers in smaller Indian cities and towns, he said.
Mr. Banglani said that any innovation that helps simplify and integrate medical procedures or even standardize administrative processes can help in bringing down health care costs. “Freeing up a doctor’s time to allow him to focus on the patient isn’t rocket science. Just streamlining basic processes can dramatically improve efficiencies,” he said.
Mr. Banglani also said that the health care industry, by taking advantage of India’s low-cost engineering and low-cost manufacturing to re-engineer standard technologies, can further cut costs. Innovations in these areas improve efficiencies, which are among the things he looks for when considering investments in health care companies.
While the term “affordable healthcare” may seem a bit vague — after all, who wants unaffordable health care? — the industry has strict parameters, say investors and innovators. They define the affordable health care sector as low-cost medical services designed for the 835 million people in India living at the bottom of the economic pyramid – those earning less than 250 rupees ($4.50) per day.
To date, private sector participation in the affordable health care sector has been low, with the government taking on the major share of spending. But start-ups in India have begun to churn out prototypes and pilot projects aimed at this market, from inexpensive, life-saving, portable ventilators, to fecal incontinence devices to multi-use diagnostic and drug delivery devices that allow biopsies and targeted fine-needle drug delivery.
The government’s latest health insurance plan designed for the poor, spearheaded by the Labor Ministry bureaucrat Anil Swarup, is also providing a boost to the industry. The Rashtriya Swasthya Bima Yojana program, which relies on a cashless, portable smart card, has already enrolled 110 million people.
In this plan, the government pays 750 rupees to insurance companies per year for each family of five who can’t afford their own insurance. The family, in turn, is covered for annual medical costs of up 30,000 rupees. Costs for medical procedures for these families are fixed by the government, and hospitals involved need to become more efficient to make profits, so affordable health care has become a priority.
“We can’t think of a more important sector with greater social impact than affordable health care in India,” said Mr. Mangat of the Omidyar Network.
Next: What is the eBay founder Pierre Omidyar doing on Delhi’s MedTech Row?
Jyoti Pande Lavakare is an author and columnist who has covered entrepreneurs from India and Silicon Valley, including producing features for All India Radio in New Delhi, and writing columns for Mint and the Business Standard. She is currently working on her first novel “The Memory of Pain”