Made in India: The Government’s Role in Supporting Industries to Tackle the Ventilator Crisis

Introduction

The onset of COVID-19 in India resulted in a shortage of medical equipment and facilities. One such shortage was in the supply of ventilators, and with COVID-19 affecting the respiratory system of patients, ventilators proved to be essential. The escalation in the number of individuals infected by COVID-19 in the first wave highlighted the need for 75,000 ventilators¹ by June 2020. As major exporting nations imposed restrictions on international trade and export of ventilators, the Indian government was forced to look at domestic solutions to resolve the dearth of ventilators.

Various private and public players in the market responded to the government’s call to produce ventilators, and manufacturing in India doubled within a month—from 2,500 units in February 2020 to 5,600 units in March 2020.¹ By June 2020, domestic players produced 60,000 ventilators and met the projected demand. This was a big shift, particularly for a country that had manufactured only 16,000 ventilators in all the years from independence until 2020. The great leap in production not only decreased India’s dependency on imported goods, but also assured availability of low-cost options in the market. Imported ventilators can cost about 16 Lakhs (approximately US$21,000) per unit,² whereas domestically produced ventilators cost as little as 1.5 Lakhs (approximately US$1998) per unit.³ Over one year, India had gone from facing an acute shortage of ventilators to exporting ventilators made in India.⁴ In August 2020, the government lifted India’s ban on exports, which allowed domestic manufacturers to access an international market.

This promising practice is based on rapid demand estimation; development of functional, technical, and infrastructural resources; and creation of a conducive environment for collaboration. It can serve as a replicable model for governments and civil bodies to respond to crises and encourage the development of a self-reliant ecosystem.

How can you replicate or adapt this promising practice?

Use demand-based distribution among states and ensure zero wastage

The department of pharmaceuticals, government of India, estimated a need for 75,000 ventilators throughout the country. The estimate was based on a predictive model that systematically incorporated the needs of all states. While the ventilators were distributed to states based on their needs, the central government also established audit mechanisms to ensure that shortages did not result in hoarding of this lifesaving equipment.

Identify and bridge gaps to create a conducive environment for production

After estimating the demand for ventilators, the government implemented an action plan focused on removing as many barriers to production and innovation as possible. Several administrative roadblocks for private companies to undertake production of ventilators were addressed. For example, the Drugs Controller General of India proclaimed that companies manufacturing ventilators will no longer be required to seek permission under India’s Drugs and Cosmetics Act and Medical Device Rules, as long as the manufacturer partners with a licensed company. A committee of technical experts was also formed under the Directorate General of Health Services, which helped prescribe minimum essential specifications for basic ventilators used for COVID-19 in India.

“The government’s procurement systems were not very quick and adaptable to begin with. However, once the pandemic hit, the government did try to relax these standards for startups.” —Shaunak Patel, Director of Sales and Marketing, InnAccel⁵

Enable partnerships among cross-functional actors to speed up innovation

India needed to produce 75,000 ventilators in 90 days, a process that typically takes 18 to 24 months. The government’s condition that ventilator manufacturers must partner with licensed companies incentivized collaboration between public and private players and enabled a speedy response. Bharat Electronics Limited, a Navratna PSU under the Ministry of Defense, manufactured 30,000 ventilators in record time. Bharat Electronics Limited manufactured the ICU Ventilator, Model CV 200, based on a licensing agreement with Skanray Technologies Private Ltd. The companies also received extensive design support from the Defence Research and Development Organisation.⁶ Soon, the government tenders were also given to Skanray Technologies in Delhi and AgVa Healthcare in Noida to manufacture 30,000 ventilators in six weeks and 10,000 ventilators in a month, respectively.

“Traditionally non-intrusive ventilators take years to develop and we didn’t have the luxury of time. We accelerated the timeline for development, by testing and validating parallely. We took prototypes to key centers and tested them with doctors who gave us input for development. ACT grants provided the funds needed to develop the product and the partnership network to deploy 600-700 ventilators in one year.” —Shaunak Patel, Director of Sales and Marketing, InnAccel⁵

What are the lessons learned from this bright spot?

The government of India launched a program in 2014 to strengthen manufacturing in India by attracting investments from around the world. The program focused on strengthening manufacturing in 27 sectors, including wellness and health care, which created a conducive environment for companies to ramp up the production of ventilators at the time of need.

Because of India’s high import dependency, however, neither the Bureau of Indian Standards nor the Central Drugs Standard Control Organisation had national standards for manufacturing ventilators. In the absence of such specifications and certifications, domestic manufacturers faced challenges in producing ventilators of a standard quality. The broken supply chains across the world also hampered the inflow of raw materials required to manufacture ventilators.

To accelerate the process of manufacturing, the Indian government and private players took strategic measures to address challenges and incentivize the production of ventilators.

Estimate ventilator demand to inform production and inventory management

A task force commissioned by the government of India (the Empowered Group of Secretaries) was created to ensure an adequate supply of essential medical devices. The panel used predictive modeling to estimate a demand of 75,000 ventilators by June 2020.¹ This growing demand for ventilators surpassed the 48,000 ventilators available in April 2020, as per the Center for Disease Dynamics, Economics and Policy.⁷ According to industry data, prior to the COVID-19 pandemic, ventilator manufacturers in India had a yearly capacity to supply 3,360 ventilators.⁸ To address this emerging gap in supply and demand, the central government placed procurement orders and distributed them on a self-reported, need-based assessment of the states. Through this predictive modeling and need-based production, the government of India successfully distributed 35,398 ventilators across different states, which fulfilled almost 100 percent of the national demand for ventilators by November 2020.⁹

Identify and leverage domestic research and production capabilities

From a research and development standpoint, the Indian Institute of Science, Education and Research, Pune, developed a prototype for a low-cost ventilator in August 2020 and signed a memorandum of understanding for mass production.¹⁰ The collaboration between research organizations and the manufacturing industry played a key role in increasing the supply of ventilators. The government gave tenders to two companies—Skanray Technologies and Agva Healthcare—to manufacture 30,000 and 10,000 ventilators by the end of May 2020. As the nation went into lockdown in March 2020, the Mahindra Group of companies, who have not traditionally manufactured ventilators, undertook the initiative to leverage their production capacity for “bag-valve ventilators” to supplement production within the country.¹¹ Similarly, Indian Space Research Organisation also developed and transferred technology of three types of ventilators to the industry during the second wave of COVID-19 (March-July 2021).¹²

“While before COVID-19 took place, 60 percent of our raw materials were sourced from outside India, but post-lockdown when other countries refused to give us the material, we are now down to 10 percent. We encouraged our own vendors to manufacture the components in India itself, we ensured them that we are here to help them and guide them through it all, so that in future, god forbid if again any such situation arises, we do not have to depend on other countries for our material.” —Ashok Patel, Founder and CEO, Max Ventilators⁶

Extend financial and human capital support to manufacturers

In March 2020, with 600 COVID-19 cases in the country, the central government conducted a meeting chaired by Mr. Ravinder, Joint Secretary, Technical Committee for Ventilators, Department for Promotion of Industry and Internal Trade, under the Ministry of Commerce. This meeting was to encourage medical device manufacturers to supplement existing production capacity. The companies were informed that the Andhra Pradesh Medtech Zone would provide 40 Crore Indian rupees for large-scale manufacturing of ventilators. The APMZ not only provided financial support but also provided a team of 25 medical technology experts and biotechnology engineers free of cost for the first three months to each manufacturing partner to facilitate immediate initiation of production.¹³

“AMTZ, under technical supervision of the Principal Scientific Advisor to the government of India and assisted by the World Bank, invites proposals from leading med tech champions.” —Proposal letter, a copy of which was accessed by ThePrint¹¹

How was the promising practice implemented?

The Empowered Group of Secretaries,¹⁴ a panel headed by Union Health Secretary Rajesh Bhushan, was established and given the responsibility of ensuring availability, production, and distribution of ventilators through domestic procurement and import. A committee of technical experts was also created under the Directorate General of Health Services to help prescribe the minimum essential specifications for basic ventilators.¹⁵

To encourage production of ventilators within the country, India’s Drugs Controller General, in partnership with the Department of Pharmaceuticals, allowed manufacturing of ventilators without any permissions under the Drugs and Cosmetics Act and Medical Device Rules, but only if the manufacturer partners with a licensed firm. This enabled startups and existing players to initiate the process of production without extensive administrative approvals.¹⁶

Ensure demand-based distribution of ventilators and provide training and support

PD Vaghela, the chairman of the Empowered Group of Secretaries and secretary of the Department of Pharmaceuticals, presented the government’s projections and procurement plans, highlighting the demand for 75,000 ventilators.¹⁷ The Empowered Group of Secretaries used the estimated demand as a guide to ensure distribution of the ventilators. Once distributed, hospitals and health care centers were provided with helpline numbers of the ventilator manufacturers and state-specific WhatsApp groups to address any concerns. These WhatsApp groups included nodal officers, hospital representatives, and technical teams of the manufacturer to solve technical issues in real time.¹⁸

Conduct audits and monitoring to minimize wastage of ventilators

Despite the judicial distribution of ventilators, reports from states showed that some ventilators went unused, whereas in other parts of the country COVID-19 patients experienced serious consequences due to shortages.¹⁹ This resulted in the government implementing monitoring mechanisms to ensure zero wastage of lifesaving equipment.²⁰ The Prime Minister’s Office directed an immediate audit of installation and operations of ventilators in various states, followed by a refresher training for health care workers.

Supplementary material

Made in India - The Government’s Role in Supporting Industries to Tackle the Ventilator Crisis.pdf

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