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Heart Connect

Whenever he's called upon to give a talk on future trends in business, CK Prahlad's favourite example is that of a cardiac implant. The University of Michigan-based management guru sees the IT enabled healthcare system of the future as one that will not only monitor a patient's vital signs, but will also relay information on any problems that may occur to his family, to his doctor, and also put him in touch with the nearest hospital, wherever in the world he may be.

Though Prahlad doesn't mention the company by name, he's referring to the cutting edge work being done by Medtronic. The Minneapolis headquartered medical devices company, which recorded net sales of $11 billion in 2006 (net profits: $2.6 billion), has launched an internet based remote monitoring system called Carelink, through which patients can send information from devices implanted in their hearts to their clinics, through a specially designed monitor box and the phone line. Carelink is only available in the USA and the data is not real-time , so it doesn't yet have the dramatic potential of the kind Prahlad has in mind. But it's getting there.

Says Michael DeMane, Medtronic's President for Europe, Canada and emerging markets, "The main advantage that Carelink presently offers patients is that they don't have to cry wolf and visit their doctor every time they feel a little weird. They can just send their data instead. Right now we're dealing with some information security issues related to this system. In the USA, people are extremely skittish about who gets access to their medical data."

Medtronic has been in India for 27 years and DeMane is visiting Mumbai with a team of senior executives to meet with the company's 160-member marketing team. "India is a small market," he says. "Price is an issue here, so we're pricing our products lower, in order to increase market share. But the biggest difference between developed and emerging markets is the extent of healthcare coverage. In the USA, the coverage is total. In India, hospitals are mostly in the larger cities and as you go further away, the coverage gets less and less."

One reason for Medtronic's constantly high profit margins is its research and development work, which ensures that two-thirds of its sales are from products that are less than two years old. Founded in 1949, Medtronics was initially in the business of repairing medical equipment for local hospitals, till founders Earl Bakken and his brother-in-law Palmer Hermundslie started designing new devices, starting with the first wearable external battery-powered pacemaker (before that, the only treatment for failing hearts was drug therapy). "Some people put us in the same bucket as pharma, but we're actually very different," says DeMane.

One difference is the extent of marketing effort required to sell implant devices. Medtronic makes hi-tech brain implants that treat Parkinson's Disease, implants that infuse morphogenetic proteins to accelerate bone formation in those who have undergone spinal surgery and insulin pumps that monitor and rectify blood glucose levels in diabetics - but doctors need to be trained in their use.

Says DeMane: "Physicians in emerging markets are less trained in the use of new medical devices, so our biggest investment here is on education. That includes bringing world renown doctors here and also taking Indian doctors to our training centre in Switzerland. Physicians ultimately have to train other physicians - "we can only orchestrate the process."

In a fresh marketing effort, Medtronic has decided to start conducting clinical trials in India, starting with its latest drug eluting stents. Named 'Protect' , the world-wide study will compare Medtronics's coronary stent (used to open up clogged arteries in heart patients ) with a similar product made by Johnson & Johnson on key safety measures.

Medtronic opened a pacemaker manufacturing unit in Pudong, China, in 1997. Are there any plans to start manufacturing in India? "We're considering it, though there are no specific commitments yet," says DeMane.

And what's his take on the medical tourism to India? "It's had very little impact on our sales in India," says DeMane. "I'd say the number of medical tourists are far less than what people imagine."

(Ref : The Economic Times dated March 2, 2007)


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