Becton, Dickinson and Company (BD), the $7.1-billion medical technology major headquartered in the United States, is one of the biggest syringe suppliers globally. The company – which generates revenues through its three divisions of medical, diagnostics and biosciences – has been present in India since 1997. CEO and Chairman of the board Edward J Ludwig tells Joe C Mathew why BD considers India important, even though the country accounts for just $100 million of its global annual income. Edited excerpts:
How do you see India as a market? Any expansion plans?
We are very excited about India. It is among the very few markets where the country head directly reports (to the US headquarters). That puts India at the same level of China, Japan and Canada. We add close to 100 people in our India team each year. On the manufacturing side, we have planned significant expansions by transferring 10 manufacturing lines of IV catheter from Sweden (to India). There is continuous expansion happening on the marketing side.
The recession had its impact on most of industries worldwide. Did it have an impact on your Indian business?
To an extent, yes. Indian business had grown 20 per cent two years ago. But the growth was just over 13 per cent last year. The revenues from our biosciences division was hit the most as this division supplies reagents and tools for research organisations. Indian research organisations had seen a decline in research programmes (due to the cut in R&D budgets effected my most global firms).
All global majors see India as a preferred destination for conducting research and development. What about BD?
We do not do much development (R&D) outside the United States. We haven’t planned any research projects that specifically cater to the developing market’s needs. But we should do that. So, in the next five years, we are going to have a few pilot development opportunities here. I can’t say when, I can’t say where, but we will start to have partnerships with the outstanding research institutes and entrepreneurial people here.
The Indian medical devices industry is in an evolving phase and the growing domestic firms are known for their low-cost production capabilities. Do you see them as a future threat?
It is a threat if we do not do anything. We are here, trying to build partnerships and learning how to take advantage of the skills here. So, we hope to have by next year some of our low-cost products (such as syringes, catheters) launched here. They may not be the cheapest, but they will definitely cater to the country’s needs. We are working out architectural changes to bring down the cost of such products. The package has been economised, the product has been re-designed… So, we think we can take 30 per cent of the cost on some of those products. That will be very competitive in the mid-segment of the market.
What are the new age devices and technologies that are being developed at BD? How soon can they reach India?
In the near term, our major research emphasis will be on (developing tools that ensure) healthcare worker and patient safety. Cancer screening methods, cellular research, stem cell research and, some day, even cell therapies … are all areas of interest. As far as product introduction goes, except for the high-end medical diagnostics, we sell 80-90 per cent of our global product portfolio in India.
Patent expiry and fewer innovations are adversely affecting the growth of pharmaceutical firms globally. Is it the same for the medical devices sector?
Medical technology is not like pharmaceuticals, where a single chemical has been patented and no one can come out with that product. In medical technology, we do have patents, but it’s more knowhow than the patents that gives the edge. It is trade skills and trade secrets – how we manufacture these products – that are important. So, patents are important, but not as important as in a pharmaceutical company. In diagnostics and biosciences, there are some patents that are critical. But, mostly, these are open systems, which others can work around.
