Traditional medical device majors are trying to reinvent themselves to remain relevant in an age where the information technology (IT) and healthcare technology divide is getting increasingly blurred. In an exclusive interview, Vincent A. Forlenza, the Chairman, Chief Executive Officer and President of US-based Becton, Dickinson and Company (BD), talks to BT's Joe C. Mathew on the evolving nature of the $20-billion medication management industry and his company's preparedness to face the emerging challenges. BD, which registered global revenues of $10.3 billion in 2015, is a leading player in the medical devices industry. Edited Excerpts:
How is technology changing the medical devices landscape world over?
Information technology companies have become very active in the medical devices space. Apple Watch is just an example. Every medication management company is, today, thinking about providing care in the healthcare continuum. Companies are trying different strategies depending on their market terrain, product line and, obviously, what they want to achieve. So you are seeing a lot of consolidation in medical devices because the buyer base and the provider base have been consolidating, especially in the US. Zimmer bought Biomet, BD acquired CareFusion. Companies are also realising that their customers (healthcare providers) have to change significantly to become much more efficient and provide cost-effective healthcare.
So acquisitions, more than technology partnerships, are equipping medical device players to face the challenges?
Yes...if you look from BD's standpoint. The acquisition of CareFusion was a major effort to create information-enabled products in the area of medication management by re-engineering the acute care medication management system. Instead of having devices that work independently, we are trying to use IT to tie everything together and make them interoperable. Other companies could be taking different approaches. You also see a large number of start-ups or information-based apps coming up for patient assistance. That is another thing happening in the industry.
What is the synergy that CareFusion brings in?
They are complementary businesses. If you look at the $20-billion medication management industry, we were in $8 billion; they were in $8 billion. Now we compete in the $16-billion market, and we are the leaders. In addition, we are also getting the informatics capability that can tie together and re-engineer products. Third, BD has a global infrastructure. CareFusion was 75 per cent US business, while BD was 60 per cent outside the US. Now we will get them integrated into the BD global infrastructure. We will have a portfolio to address the global marketplace.
Are you working on IT-based apps, too?
We have a diabetes device now, but you can definitely see more such products in future. Similarly, we have a software that interrogates the pharmaceutical databases and tells the hospital about the patient's medication history. It helps if the patient, who has arrived in the emergency ward, is suffering from trauma and can't remember anything. This software can pull out information from the records based on the patient's previous visits.
What difference will it make to your India business?
We are going to see new products being introduced here. For medication management, for example, we will see infusion pumps and infusion sets coming in; technologies for pharmacy automation will be introduced. In India, the focus will be on market development - on deeper penetration of the market, not just the top tier, but also the middle tier. We have the products to do that. So, to cater to the smaller hospital marketplace with our existing products, getting the CareFusion products registered here, which takes a little time - a year or so - and then adding them to the portfolio. Increasingly, we will start to sell more solutions than individual products.
Where does India stand in terms of growth?
Indian business is currently less than 2 per cent of BD's global sales. Our investment will be proportionate to the opportunity here, not sales. India is one of the top three markets in terms of growth percentage. China was growing faster, but right now it is very close. In terms of relative attractiveness, in the last few years, I would say that India is becoming a more attractive healthcare market for medical devices companies due to a number of factors: the growing middle class, the growth of insurance systems, FDI and investment by private proprietors, whether it is Apollo or Fortis, in building infrastructure with global capability.
How do you rate India in terms of ease of doing business?
It is improving. It's still early days. I am optimistic about the opportunities here.