CORONARY STENTS

& BALLOONS: SIZING,

ANALYSIS OF THE
INDIAN MARKET

Commissioned by Best World Surgery

Introduction

• The coronary stent market in India is valued at around Rs 1,500 crore ($220m), which amounts
to a fraction of the $7.6bn global stent business. The market is dominated by multi-national
companies (MNCs), which have around an 80% share. Indigenous firms, numbering around 11,
account for the remaining 20%.

• According to the Institute for Health Metrics and Evaluation, ischaemic heart disease topped the
causes of death in India, with a Lancet study estimating that heart disease and stroke accounted
for 28% of all deaths in 2016.

• The government’s Make in India campaign and recent regulations capping the price of stents in
the country, has resulted in a strong push for local manufacturing. Nevertheless, such policy
developments indicate that market conditions are ripe for an increase in demand for stents.
Core forecast
• Data from the Cardiological Society of India (CSI) shows that cases requiring Percutaneous
Coronary Intervention (PCI) and consequent use of stents have been steadily going up over the
last decade. Just over 1,10,000 cases of PCIs were reported in 2010, but this figure rose to over
3,70,000 in 2016 (latest available data).

• In 2016, the number of coronary stents used in the country was around 4,78,770 while in 2017,
an estimated 5,08,400 stents were used in surgeries. We expect this figure to have risen by over
13% in 2018 and expect the market to grow by an average of around 10.1% over the next two
years to finish 2020 with a demand for around 6,97,646 stents.

• Part of the growth will be driven by the increase in both public and private health expenditure.
India has allocated Rs9.6bn towards eradicating premature deaths from non-communicable
diseases and increased investment in cardiological treatments will be vital towards meeting this
commitment.

• The economy is also expected to grow at a robust average rate of 7.3% during 2018-2020. The
country’s total health spending will rise at an average of 11.9% over the same period, further
supporting sales of medical devices.

• Historically, stent sales in India have been low by global standards despite a considerably high
prevalence of heart disease in the country. India’s Health Ministry data shows that there are
around 30 lakh coronary heart disease patients in the country. According to the CSI, around 60%
of these patients go untreated.

• Factors contributing to low penetration of stent treatments include high costs and a low
personal disposable income of around Rs 84,962 ($1,207) yearly. The World Health Organisation
 (WHO) data showed that out of pocket expenditure accounted for 65% of total health spending
in 2016 (latest available data). The problem of affordability was also compounded by poor
insurance coverage.

• This represents a huge untapped market for the health industry and recent policy changes to
address the issue of health coverage have been encouraging. In 2016, the National
Pharmaceutical Pricing Authority (NPPA) introduced price caps on stents. In February 2017,
prices of life-saving stents were slashed by NPPA by over 70%. Further price cuts in 2018 meant
that most stents now cost anywhere between Rs 25,000 and Rs 32,000.

• The budget for fiscal year 2018/19 saw healthcare allocations being raised by 11.5% to Rs528bn
(US$7.5bn). In 2018, the government also introduced the Ayushman Bharat Scheme, providing
annual insurance coverage of Rs 5 lakh per family, benefitting over 50 crore people. The scheme
also includes provisions for stent treatments at rates that are 15-20% cheaper than those under
the Central Government Health Scheme (CGHS).

• The Goods and Services Tax (GST) structure — introduced in 2017 — eliminated compounding
tax increases on a product, with the rate fixed at 12-18% for all medical equipment, including
cardiac stents. It also did away with taxes on treatment costs, although it raised tax on health
insurance premiums.

• These measures are aimed at dramatically improving the affordability and appeal of these
devices and are expected to drive strong growth of the stent and balloon industry well beyond
2020. The cheaper rates are also likely to lead to a growth in medical tourism. However, the
impact of this on stent procedures is likely to be minimal.
Balloons Market

• The balloons market has been growing steadily over the last ten years. There are no official
sources of data on the market but independent surveys suggest that the market likely to grow at
an average rate of 4.2% in 2018-2020 to be worth around 7.1 million in 2020. An average growth
of 4.5% is expected in volume terms over the same period.

• Sales of coronary drug eluting balloons comfortably outstrip peripheral drug eluting balloons. In
2017, their markets were worth $2.7m and $0.3m respectively.

Other demographically relevant trends

• The CSI estimates that of the 30 million people with coronary heart disease, 14 million are in
urban areas while the remaining 16 millions are from rural areas.

• In line with this statistic, catheterization laboratories in smaller hospitals and cities are
performing more interventional treatments.

• People under 40 years and above 70 years of age are increasingly at risk of cardiovascular
diseases. Over 70% of India’s population falls in this age bracket.

(Note: The data for stents used in this report is compiled by the National Interventional Council
(NIC) under the Cardiological Association of India. However, the data is based on the number of
catheterization labs that report their numbers and only reflect 70-80% of the market figures.
Hence the actual size of the market is expected to be slightly larger than projected figures.)
This would suggest that Vikash Veerasamy, BWS global head of cardiovascular disease, was
more correct in his estimate of surgeries requiring use of stents in the country.
The Market

Changing dynamics

▪ About 75% of all medical devices in India are imported but price caps and a change in the tax
structure have changed the stent market dynamics over the last two years.

▪ Prior to 2016, import duties on raw materials required to build or assemble medical devices was
higher than that on fully-assembled units.

▪ However, as per the 2016 Medical Devices Rules, this duty structure was inverted, reducing
customs tariffs on raw materials to 2.5%. Duties on finished products went up from 5% to 7.5%.
These developments meant that local stent manufacturers now had a fighting chance against
the more widely-used MNC-based products.

Main players

• The share of Indian stent manufacturers doubled in 2017 to around 20% of the market, even as
many foreign players refused to reduce the prices of their products.

• Three manufacturers —Translumina, SMT and Meril — account for around 80% of the Indian-
made Stents market. The leading MNC stent makers were Abbott Vascular (with about 40% of
the counry’s stent market), Medtronic and Umbra Medical Products.

• However, recent media investigations have revealed that cardiac stents topped the list of faulty
implants in India, with Abbott and Medtronic topping the list of manufacturers with a high
 incidence rate. The government is now likely to tighten the regulations regarding safety and
approvals over the next few years.

• We expect the MNCs to bounce back, with the rider being that they must be willing to adhere to
price caps and improve the quality of their products or risk losing their competitive edge.