Interview with Hari Buggana, Founder and Chairman, InvAscent, Hyderabad, India
The reason much of the global healthcare market consumes generic medications is that they are an effective, sustainable way to manage patient outcomes and control healthcare costs, says Hari Buggana, Founder and Chairman of InvAscent, a leading life sciences private equity firm based in India. The enterprise works closely with small and medium companies—constrained by capital and experienced workers—to export high-quality, low-cost medications. In an interview with IFC, Buggana explains the obstacles to strengthening India’s healthcare system and strategies to shore up local production of drugs and medical devices.
What more can be done to strengthen India’s healthcare system?
Most of India’s population lives outside one of the big six metropolitan areas and the 25 tier-one cities. While primary care is available at most hospitals and clinics there is a need for expanded specialized tertiary care in smaller towns, including services such as cancer treatment, cardiac care, neuro surgeries, and neonatal intensive care. It can be challenging to attract enough doctors and nurses to work in rural areas and smaller villages anywhere in the world, because the social infrastructure can’t compete with what larger cities offer. Doctors and nurses want options when it comes to educating their children; they want to go out to dinner and the movies at night. The situation is no different in India.
What factors have driven India’s dependence on the import of medical devices?
Historically, importing medical devices has been cheaper than manufacturing them at home. Let’s take a stent as an example. Producing a stent involves securing high-grade alloy steel tubing and applying a medical-grade polymer resin. Then, the right equipment is needed to cut the tubing into small pieces after which a laser is required to shape the stent, and the device is coated in a drug to reduce inflammation. When tariffs on the import of raw materials and components exceed taxes on the import of the final product, it’s referred to as an inverted duty structure. Companies face reduced profits and customers experience higher costs: the model is unsustainable. One other factor worth mentioning is the lack of data. Profit margins in the medical device sector are slim, so local companies haven’t invested in generating clinical data. Understandably, most doctors are more comfortable using devices that are backed by scientific studies and have preferred imports for this reason.
What has India done to scale the domestic market?
The government has responded to the reliance on imports in four ways. First, they removed the inverted duty structure. Several entrepreneurs in India used the opportunity to establish businesses to produce and sell high quality medical devices to serve as substitutes for very expensive imports of similar quality. Second, they supported the creation of med tech parks. Med tech parks are essentially plug-and-play alternatives. Typically, it takes about two to three years to get a factory up and running with companies having to secure land, power, water, and licenses. These facilities have enabled medical device companies to scale up production in a year or less. Third, India has implemented production-linked incentives. If companies are making products that directly serve the Indian market from a health standpoint, they receive financial rewards. Lastly, the Indian government initiated a “Make in India” campaign to challenge the norms around manufacturing. All these efforts collectively have encouraged companies to become self-reliant, which also benefits the Indian economy.
InvAscent is helping small and medium pharmaceutical companies scale up exports to other emerging markets. What factors are driving the decision to expand outside of India?
Pharmaceutical exports have been going on for decades. Today, India is a global champion in exporting high-quality, low-cost medicines. We export to almost 80 countries, with North America being the largest destination. A better question might be—why are so many countries consuming generics?
The answer is that global populations are getting older, and many suffer from non-communicable diseases that require drug intervention. If a patient doesn’t need a cutting-edge drug and can be treated with medications that have gone off-patent and continue to be clinically effective, why not? Let’s say an elderly patient has high cholesterol, and the prescribed treatment is a statin. A generic statin will get the job done and cost about one-seventh the price of a newer medication. This scenario is happening in many disease areas. In 2005, approximately six out of ten prescriptions dispensed in U.S. pharmacies were filled with generic medicines. Today, it’s almost nine out of ten. Generics are a much more sustainable solution that leads to positive patient outcomes and just makes good business sense.
A little-known fact is that some of the larger pharma companies in India that export a lot of generics, source them from smaller, leaner companies that can supply them at competitive prices. InvAscent has funded and worked with small and medium enterprises (SMEs) on strategy, organizational effectiveness, and governance. So, it’s not like we have started a trend of getting smaller companies to export. We have been enabling them as they were constrained by capital, knowledge, and experience.
InvAscent has deep experience in the health sector. How are you transferring those decades of knowledge and expertise to foster sustainable growth?
Our team comprises experts in their fields. We have a pharmacist who has developed many of these generics, a doctor with years of experience in treating patients, and engineers with shop floor experience to support our SME clients.
As I mentioned, most SMEs are constrained by capital and talent. So, we work closely with founders and CEOs and help them make decisions around capital allocation to maximize growth. We also help them build their teams by thinking through what kind of people they need and how to empower and incentivize employees. Most smaller companies don’t have a C-Suite, so we essentially fill that role as advisors. Lastly, we ensure these leaders are equipped to be good corporate citizens who give back to the community and comply with tax laws and governance.
What trends in healthcare delivery are you most excited about?
Our mission is to make healthcare affordable and accessible and to earn a commercial return. Any technology or business process innovation is exciting. It could be a new way of producing an active pharmaceutical ingredient—a process innovation—that lowers the cost of the entire medicine. It could be an AI algorithm that, when combined with a device connected to a patient, detects diseases with high accuracy. For instance, Remidio is a medical device manufacturer in India that invented a small machine that uses AI to analyze an image and can determine if a person has cataracts with 95 percent accuracy. Patients can visit a kiosk in their local pharmacy, look into a instrument, and obtain immediate results. They don’t have to make a trip to an ophthalmologist in the city or miss a day of work. When we can make a dent in the accessibility or affordability of healthcare, I find that exciting.
This interview has been edited for length and clarity.
Published in March 2025.
Hari Buggana is the Founder and Chairman of InvAscent—a Private Equity firm focused on providing growth capital to healthcare, pharma and medtech businesses in India. Prior to establishing InvAscent in 2005, Hari was a management consultant at McKinsey & Company. During his stint at McKinsey, Hari primarily worked with life sciences businesses in US, Europe, and India on a variety of issues ranging from corporate strategy, mergers & acquisitions, product-market strategy, R&D productivity, organizational effectiveness, and operations improvement. Hari has an MBA from Kellogg School of Management, Northwestern University and a M.S. in Chemical Engineering from Illinois Institute of Technology, Chicago, USA.