Medical device industry suffers up to 85 percent drop in revenues during April-June: MTaI
New Delhi: Medical technology industry has suffered around 50-85 percent drop in revenue during April-June with a decline in surgical procedures at hospitals due to COVID-19 situation, industry body MTaI said on Wednesday.
Medical Technology Association of India (MTaI), which represents research-based medical technology companies in the country, said the government should consider reducing tax burden on medical devices in order to revive the sector.
Elaborating on the current situation, MTaI said elective procedures (surgeries) drive a large part of the demand for medical devices and the postponement has severely impacted the revenue streams of the medtech industry.
The estimated revenue downfall in the cardiology category is up to 60 percent in the first quarter of the financial year, while in the orthopedic industry devices segment there is a revenue fall of around 85 percent, MTaI said in a statement.
Similarly, the opthalmology sector has also recorded a fall up to 75 percent in its revenues during April-June, it added.
Even the critical care device segment fell to nearly half, MTaI said.
"Due to the shrinking margins of the hospitals, the channel and service dealership networks, and sub-dealers are already experiencing significant workforce downsizing," it noted.
So far the global medtech fraternity have heeded to the government's request of protecting the jobs of its workforce, even while facing significant financial blows. However, if the situation does not improve, these efforts may not be sustainable, MTaI said.
"We request its immediate intervention to help the sector recover so that it can continue fulfilling its role in ensuring critical care services in the country, MTaI Chairman and Director General Pavan Choudary said.
In order to help the sector recover, MTaI has sought resumption of elective procedures in hospitals by issuing safety protocol/SOP for non-COVID procedures and customs duty exemption for medical devices.
"We request the government to consider giving basic customs duty exemption to the medical device industry to cope with the liquidity challenges during this time," it noted.
It also sought revocation of health cess on medical devices.
The government should revoke the additional five per cent health cess on medical devices imposed from April 2020, MTaI said.
A not-for-profit organisation, MTaI was established in 2016. Currently, it has 37 members, including Johnson & Johnson Medical India, Bausch & Lomb, Boston Scientific and Alcon.