US pharmaceutical and medical device maker Johnson and Johnson (J&J) last week inaugurated an orthopaedic and neurological care research and training centre 55km outside Chennai. J&J Medical Asia-Pacific’s chairman Michael del Prado and J&J Medical’s Indian unit managing director A. Vaidheesh speak about their plans in an interview. Edited excerpts:
How did you come to choose Chennai as the home for the second DePuy Institute for Advanced Education and Research in Orthopaedic and Neurological Care?
Prado: Today, just about 1,600 doctors can perform joint surgery in India. If we look at that number versus the prevalence of the disease—five million Indians suffer from knee-related problems such as arthritis, which is causing severe pain, getting people off the workforce, and not allowing them to enjoy life.
Hopefully, this centre will help address the capacity gap. We plan to hold many courses over the years, and we are targeting about 1,000 surgeons being trained every year.
We chose Chennai as it has a supportive ecosystem here—faculties, hospitals, cadaver labs and access to students. This (Chennai) centre is dedicated to orthopaedics and neurosciences, so it is very focused. The courses that we will run here will be accredited as continuing medical education units to the Medical Council of India (MCI).
Did you have any problems dealing with MCI?
Prado: There will be complexities as you mention that we will have to navigate through, but I believe the commitment is big because the need to increase capacity is there. And we need to do something as an industry, because we are partnering with government, universities, insurers and doctors.
Do you see a conflict of interest when you see potential customers in the doctors you train?
Vaidheesh: We do not want doctors to use our equipment without being trained, so it’s a moral responsibility on our part to train them. That’s a large portion of our commitment of establishing a training facility. In a lot of colleges, procedures are not taught and doctors would not know how to do joint replacement. But when he becomes a doctor, he will be confronted with patients who need it. We tie up with hospitals and train them over a period of one year. The question is, if we don’t do it, who is going to do it?
What are the growth prospects for your business in India?
Prado: We are optimistic and there are a lot of good things happening in India. Economic growth is around 8-9%. There are a lot of new people joining the workforce. And as more Indians join companies, many more people will get some form of medical coverage. And in Asia, when people become employed, they also care for their parents. So there is a ripple effect of economic empowerment, you get personal coverage, and you will be in a better position to care for your parents.
Are private hospitals or government hospitals your biggest consumers?
Vaidheesh: The government spends 1% of GDP (gross domestic product) on healthcare, whereas the private sector spends 2.5-3%. Most of the lifestyle diseases are being more or less managed by the private sector. For J&J Medical, government does play a role, but they are not the biggest (contributors). They contribute to one part of our business, but not necessarily all.
Is your research and development in China superior to that in India?
Prado: Our China and India teams work closely together because they have similar market conditions, and we need to listen to the insights of both the teams. Interchanging ideas will help improve global understanding, so this process is not just in India and China; it’s everywhere.
What is the contribution of emerging markets to your global revenue?
Prado: We can’t give you the exact figures, but the contribution of emerging markets is growing significantly. The shift has happened. In 2010, global sales through J&J Medical Devices and Diagnostics was $24.6 billion (Rs.1.08 trillion). This is 40% of the overall sales of Johnson & Johnson.
What share of the market are you seeking?
Prado: Out of the five million Indians who suffer from knee problems today, less than 100,000 patients get their knee joint replaced every year, in contrast to the US where the figure is much higher—about one million patients go in for knee and hip surgery. We project that the Indian market will triple over the next five-six years.