Locally produce medical devices slash treatment costs by 25%

Under the dynamic leadership of Moushumi Islam, managing director of Promixco Ltd, has made significant strides in policy development for the medical device industry. It would not be overpraising if it would say that it was the MD whose determined afford resulted in inclusion of the medical devices and equipment industry in the National Industrial Policy 2022.

After endless afford last year, she and other manufacturers are now looking for the government help through budget for the year of FY25. And Moushumi Islam, MD shares all about the development from her own business to the steady but not the least reformation of the industry related policy in an interview with Views Bangladesh’s Kamrul Hasan.

 
What inspired you to enter into medical device industry that was not even much promising sector at the time?

Producing medical devices locally and making it sustainable was unimaginable for many during starting of the century in Bangladesh. But to me, medical device industry was to be an interesting, profit generating business that aims helping the people save their lives.

You know, treatment procedure started with disease investigation that requires highly but complex technical machineries. Again, as non-communicable diseases are on the rise, people are getting aware then ever and machines like blood pressure measuring machine, blood sugar detecting machines or thermometer are on high demand. So, we came up with the idea of manufacturing machines locally to provide them at cheaper rates.

Besides, Bangladesh will be the ninth largest consumer market by 2031 and so the market will also expand. The craziest part of our vision is that I realized that to establish an unconventional business in the country someone needs to be gone crazy and I chose to be the one, myself.

I can recall in 2000 when I decided to start up business, it was a purely import-based business. I continued it for almost six years. But, in 2007 I decided to step up and from 2007 to 2009, I started dismantling machines imported from China and reassembling them to validate if I can at least assemble them in the country. The experiment paid off and I decided to go for manufacturing and assembling some of these machines.

The first machine we made was Nebulizer, a small device that needs nearly 70-80 components to complete. The other machine we made at the same time was weight machine.

I prepared myself till 2013 and I started carrying out market research and searched for a large-scale investment in manufacturing machines. My first was factory set-up in 2014 with taking a loan from IFIC Bank.

Now I am focusing on establishing a well-organized R&D, manpower generating activities and assisting government authorities concerned in policy development in favour of the newly recognized industry that has potential to be an export-oriented sector in near future.

How many products are you producing right now?

Starting with Nebulizer in 2007, Promixco is now producing 270 medical devices in the country. Among them, it is developing 30 including 7complex medical devices, 80-90 medical furniture and 60-70 MSR products.

Now we are working mostly on mechanical part of the machineries and some of the products are in test and trial stage of electric functions. If it can be successful, the complex machines would also be produced locally.

We are trying to produce arm x-ray machines, the electric function of the machine is currently under trial and tests. We are producing ICU, HDU and NICU beds and *80% of the products, including the electric parts are produced locally. Only 20% of the total parts are imported right now.

We are also working with producing Zero Shade operation light and tables. 40% of the raw materials of the surgical machineries are imported right now while we are expecting to bring it down to zero percent within six months.

Our primary estimation is suggested that if the medical devices can be produced locally and the maintenance services could be provided locally, the over-all medical cost of the patients could be 25% less than it is right now.

You are working restlessly for last two decade to ensure an effective policy in place for the development of the sector. Would you share your experiences during your journey?

As medical devices are non-traditional devices, I wanted to avail domestic benefits that are provided by the government for the sustainability of the industry. So, I wrote to commerce ministry, finance ministry, the National Board of Revenue (NBR) and Bangladesh Investment Development Authority (BIDA). I sought help from DGDA as well.

And after many meetings with the concern government officials, the industry finally included in National Industrial Policy 2022. But unfortunately, we do not see much for the industry in the budget of FY24.
So, I communicated with the members of the medical device producers’ association and approached to the necessary government offices.

When the whole country was busy with national election, I worked hard for the policy development for the industry. The members, who was invited in any stage for any program, gave unconditional support to the afford and so, the government offices heard our plea. And now they are seeing the industry as one of the most potential foreign currency earning business industry of the country. We are hoping to see a good development in policy measures through budget of FY25.

Again, I need to mention BIDA, who is working actively to connect the industry entrepreneurs with foreign investors.

What are the problems the industry is facing right now?

As local manufacturers know very little about the comparative technology needed for investing in the sector and having lack of backward linkage many investors kept away from investing in this sector.
Importing raw materials for production is putting the industry into a bottleneck situation. Government should ease the official process and assist manufacturers to have access to the market. Investments with linkage to international suppliers will make it easier to access the already established global market and make the industry more sustainable.

Under-invoicing of imported devices has to be monitored and prevented. The authorities should develop the Medical Devices Manufacturing Guidelines. And The Directorate General of Drug Administration (DGDA) should avail of international technical resources to develop the Guidelines.

You can manage new funds (finance) more easily than ever as the world has already recognised Bangladesh as their new investment destination. What lacks is a well-planned proposal and negotiation. As I said manpower is the biggest concern. We have an available and cheaper labour market, but they are not skilled, not even semi-skilled.

Education is another concern. We need to build an education system so that we can get fresh graduates who know about the industry. And finally, the government needs to be more sensitive towards the sector.

Do you think the newly recognized industry catching eyes of big industrialists of the country? What is next for the new entrepreneurs?

Definitely, the industry is attracting local investments and new entrepreneurs are coming in. once we have limited entrepreneurs besides us. But now, many from pharmaceutical industry as well, are entering into the industry.

It was difficult to find out four to five initiatives previously. But now nearly 20 companies are initiating the production. The greatest part is that Promixco is advocating from the very beginning and now the sector is recognizing it.

What are needed at this current moment are opportunities and support and most of the government willing.
Medical Equipment Exporters already receive 50% tax exemption for income derived from export, no VAT imposition on export goods, 10% cash incentive on export value. Besides, Concessional import duty on raw material imports of medical equipment is also given to Medical Equipment Manufacturers.

But these are far from necessary assistance from the government. Right now, we are seeking a new, modified duty structure and also duty subsidy for the industry. We are also seeking the benefit of manufacturing non-traditional product incentives for rapid growth of the industry.

Besides, we want a government initiative for the quality products that we are making locally, for example imposing extra duty on the imported products.

What is the future of medical device industry?

Finding relevant data in this regard is really difficult. But what I can say that in urban areas, as the NCDs are increasing, we have seen that some 15-20 per cent of the families having such patients have already bought some essential machines like blood pressure measuring machine, blood sugar detecting machines or thermometer. And many are asking about the prices.

Hence, the future of the industry in and outside country is very bright. The industry can serve in three ways.
Firstly, being self-dependent in medical device manufacturing, it will save our foreign currency and the time of healthcare providers and can reduce treatment cost upto 25%. Secondly, ensuring quicker service responds for machineries maintenances. And, finally, as our production cost could be less than that demanded by global companies, we can open up the international market, especially in lower- or middle-income countries, which means a new industry for export from the country, a new source of foreign currency income.

According to World Bank estimation, the market of the industry could be US$800mn within 2026. And to grapping the market and keep the money in the country, there is no alternative of a self-sufficient country in producing medical devices.