Strategies to penetrate the Medical Device Industry in India

Abbott Healthcare is a leading provider of medical devices for interventional cardiology. Its major competitors in the field are Johnson & Johnson, Medtronic and Boston Scientific with the 4 companies capturing about 60% of the market.

With the expansion of the hospital industry and increased competition in the medical industry, the purchase decisions shifted from the doctors to the hospital administration. The final decision makers considered cost and quality as the major factors to make their decisions. Abbott has till now focused on building relationship with the doctors. With the recent changes Abbott realized the need to concentrate on the administration staff and gain their confidence. The strategies of its other competitors being; Johnson & Johnson focuses on building relationship with the doctors while Medtronic and Boston Scientific focus on nurturing their relationship with the distributors who supply their products to the hospitals.

With increase in government taxes and stringent rules on product quality through TRAI, these companies faced huge increase in their operating costs leading to a reduction in the margins. Thus, cost became a major factor while selling any medical product to the hospitals. Companies are thus aiming for such activities and programs which can help build company trust with the hospital and capture the market.

The research project aims to focus on the above issues namely understand the purchase process of hospitals to understand its target audience and build relationship with them. Secondly, being a highly competitive market each product has a substitute with equivalent quality and reduced cost, thus to survive in this market, Abbott needs additional programs and services which are valued by the hospitals and its administration. Impact of administration and doctors on driving the purchase and usage of newer medical devices. Identify bottlenecks and factors that drive the purchase decisions

An exploratory research is conducted to understand the above facts from the hospital purchase department and the catheterization lab doctors and technicians. This involved a face to face interaction with the sample from hospitals across Delhi/NCR, Chennai, Bangalore, Hyderabad and Mumbai. The sample consisted of all the hospital purchase managers and head technicians across 52 hospitals.

The results conclude that a standardized purchase process is followed across all hospitals. Doctors still play an important role in recommending the right quality product but their decision is both questioned and verified by the administration and top management. Thus, the autonomy of doctors has reduced. Secondly, the activities most valued by hospital administration are training programs and seminars of product launches and latest technology in the market to the hospital staff including doctors, nurses and technicians. They also value funds received for sponsoring poor patients and other hospital programs.

Next step would be to complete the interviews across all the cities and compile the data gathered from the various hospitals to come out with a strategic plan for Abbott on how to build relationship with the hospital purchase decision makers and the key activities to be performed as the first step towards this plan.