US-based Medtronic is the worlds largest medical technology and solutions provider operating in over 150 countries, with 76 manufacturing units, 90,000-plus employees and annual revenues in excess of $30 billion. Medtronic, which spends over $2 billion on research and development (R&D) in a year, is mainly focused on solutions in cardiac and vascular care, diabetes and minimally invasive and restorative therapies. It has been operating in India since 1979 and has two global R&D centres in Bangalore and Hyderabad focused on renal care and engineering services. This is apart from its first global IT Solutions Center, established in Bangalore in 2014. Edited excerpts:
What all medical innovations are expected in the next five years?
Many innovation efforts are happening across our portfolio. In most countries, the pacemaker used to be large and sat under your skin for many years. Our innovation will focus on miniaturisation with batteries that can endure for long term. So, we are bringing all our knowledge together to create a pacemaker that sits inside for a long time. You make a cut in the leg and send the pacemaker into the heart; the patient doesn't even feel the pacemaker.
Similarly, in diabetes, AI innovations will decide how much insulin needs to be delivered every day by measuring the kind and quality of food the patient is eating. A lot of changes are happening in robotic surgeries with remote capabilities and use of AI. For instance, implantables in the brain are becoming smaller? They will become smaller and much more effective with algorithms that are going to come out.
Affordability of healthcare is an issue. How can you help as costs are the main reason a lot of people are unable to access healthcare?
Access to healthcare is definitely one of the biggest challenges around the world. Collaborations between companies and governments are going to be important. To ensure that access to healthcare is broadened, we're definitely in support of working in collaboration with the government of India. It is innovation that will make the difference. Innovations always dont have to be expensive. Today, the focus has been on the higher end of the market, but as we look at the impact the new technologies can have, I think they will be great equalizers over time. Its definitely an area of focus for us.
A large chunk of Medtronic revenue comes from the cardiovascular field. Now that you are into robotic surgery, how is it evolving?
Today, the medical technology field is poised for great innovations. Our CEO has stressed many times that Medtronic will put tech back into med-tech. Medical technology has primarily focused on engineering skills like electrical engineering or mechanical engineering. But we are expanding to areas like digital and other aspects of software in order to go where the industry is heading. We are poised to be right at the centre of that transformation. I can say MEIC is putting us at the forefront of that change.
Robotics will play a very critical role for us, whether it is in spine surgery where we already have products or the new robots that we will be launching going forward. The team at MEIC is working on various robotic programmes. The MEIC team will play a key role in areas like cybersecurity. The team is working on all cutting-edge R&D of Medtronic, mainly related to software and engineering.
You mentioned about changes in med-tech field. In which direction is research in medical devices progressing?
The change will first happen in consumer facing areas, and that will give direction. This is because you dont have the potential risks. Consumer will take the lead. Artificial Intelligence (AI) and machine learning will come into medical devices. Look at the main acquisitions we have done in the last one year. We are confident these areas will make a key impact. We are looking forward to working with regulators because AI and machine learning are new in the med-tech space. These technologies will be absolutely critical for us going forward.
How sure are you of the IP environment in India?
Medtronic has R&D locations in over 20 countries. Are there some countries where we have not gone because of IP? The answer is sure. We take all the factors into account while taking decisions and make sure that there is framework, infrastructure and government willingness to talk if there are any challenges. So, ability to talk to the government and discuss these topics openly is probably a big positive in our decision to set up the centre in India. If the risk level was high, I am sure we would not have done it. The ability to discuss these topics has given us confidence.
Recently, the Indian government took a few policy initiatives to promote Make in India for medical devices. Are you happy with the incentives and the policy environment?
We have been pleased with the level of collaboration weve had both with the government of India as well as the government of Telangana. The interactions with both of them have been positive. This has been most important for us as we considered many locations around the world. The ability to have direct conversation and policy support or policies where industries can collaborate with hospitals and educational institutions is something very positive.
India has a very large population. The medical device market is still in its early stages of growth. So, there is definitely potential, though the market is small from a global perspective. Governments can ensure access to more state-of-the-art medical tech to patients in India. So, we look forward to such collaborations. We have to make for India and make for the world, since India is a small market now. We are definitely looking at a big market in India in future.
How much have you invested in R&D in India so far? Ten years ago, what were the factors you took into account when you decided to invest in R&D in India?
I dont have a cumulative number, but if you look at our current investment plan of $160 million over the next five years, that is a sizeable increase. Ten years ago, we had no R&D in India; it has gradually increased over the years. Investment in R&D is absolutely critical for Medtronic. This is something that our CEO has said on many occasions. Annually we spend $2.3 billion on R&D globally. And now we are seeing significant growth in R&D in India.
There are many factors that drive R&D investment decisions such as existing innovation environment or potential to create such an environment. The innovation environment includes R&D, government policies, ability to get talent in the right areas, etc. So, this was a big positive from India. Talent and capabilities in India were critical factors. People are also willing to move to Hyderabad from other locations in India. The third point is that this is a partnership. We are not in this to set up an R&D centre and go away. There is a longer-term plan for us. This partnership with India is for working closely to meet the healthcare needs of India. India will be the largest in the world in number of patients and number of doctors.
What is the kind of investment you are looking at in India considering the potential? What are the growth opportunities you see in India?
The Indian market is definitely continuing to grow and our investments will be driven by two big aspects. First is growth within healthcare infrastructure and growth of healthcare and medical devices in India. Second is continued growth of talent and education system in India. I am very hopeful of the positive growth we see in India, and in the end, investment comes when you deliver. Our MEIC team has been very good at that. The future is bright, and the best I can say is that we are going through a start-planning process. If the last three-five years were any indicator, our India R&D centres have earned the right to be heard and be part of the global R&D development; they have done an awesome job.
Medtronic is investing $160 million to expand the Medtronic Engineering and Innovation Center (MEIC). How will that contribute to your global R&D plans?
MEIC will support 15 Medtronic operating units around the world and work on some of the latest cutting-edge healthcare technologies in software development and testing, mobile apps for medical use and engineering research. The work will include robotic-assisted surgery, surgical navigation and imaging, surgical devices, implantables, ventilators and many others. As announced, $160 million will be spent over the next five years on physical infrastructure as well as human and scientific capital. We have over 400 employees at MEIC. It is about building talent on engineering and software side of things.
We have been commercially operating in India for over 40 years. We got into innovation in India about 10 years ago and have grown from there. The role India has played in being at the forefront of technology and having the right skill sets are probably the main reasons for our interest here. The medical device (segment) in India has been growing for decades, and I think with the convergence of digital technologies, India is well-poised to leap further. We are looking at MEIC to be that core for us. It will be our largest R&D location outside the United States. We have confidence in talent available here and also the future prospects.
What is the direction of medical innovation R&D going forward for Medtronic? How important will that be for global business in the future??
With Geoff Martha coming in as CEO, we have gone through a global reorganisation, with focus on operating units. We have 20 different operating units specialising in surgery, cardiac procedures, neuro modulation and the like. From an innovation and R&D standpoint, it is important to be close to the customer. Thats why all our R&D teams are within those operating units. We know a gynecologist or a surgeon or a cardiologist as a healthcare specialist, but their areas of work and needs are very different. We do R&D in more than 20 countries. The advantage with India is that it is an enterprise asset, which means this is where we can use the power of our technology and talent to help most of our operating units. MEIC is in a unique position to help multiple operating units across Medtronic. This is just the start of the journey.
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