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Separate Rules To Spur Medical Devices Sector Soon

In lines with the prime ministers ‘Make in India Campaign’, the department of industrial policy and promotion (DIPP) has identified medical devices as one among the top five sectors having good investment potential in the domestic as well as export market. The government has approached the industry, to gauge the market dynamics and understand their demands and challenges.

In a bid to encourage investments in domestic manufacturing, the government has also recently allowed 100 per cent foreign direct investment (FDI) under automatic route in the medical devices sector. Such investments would also be exempted from other caveats such as the ‘non-compete clause’, which is applicable for FDI in existing pharmaceutical manufacturing units. Easing of norms for medical devices industry by creating a special carve-out in the existing FDI policy in the pharma sector will encourage FDI inflows.

This comes at a time when manufacturers in the country are facing challenges like import and export related issues, inverted duty status, Free Trade Agreement (FTA) etc.More than Rs 20,000 crore medical device market in India is highly unregulated and unorganised. Besides this, 10 per cent standard duty and 12 per cent excise or countervailing duty add to the cost which has posed a major burden on the manufacturers. There are 10 major international players and around eight local players in the highly unorganised and unregulated market.

Quality has also taken a beating as manufacturers from outside India might dump sub-standard products as there is no regulation in place. Products are often being labeled with a high price due to lack of any regulation in terms of pricing as most of the medical devices have not been notified by the government under a separate set of rules.

Admits an official from the Union Health Ministry, “There is an urgent need for separate rules for medical devices which is therefore being proposed in the new amended draft bill on Drugs and Cosmetics Act to be tabled in the budget session of the parliament to give the much required boost to the sector.

Alarmed by unusual spikes in prices of medical devices like cardiac stents and drug-eluting stents, the pricing regulator National Pharmaceutical Pricing Authority (NPPA) has also sought pricing data from manufacturers, importers and distributors of these devices. For monitoring of price movement of notified medical devices as drugs under DPCO, 2013, NPPA has asked the manufacturers and importers of medical devices in the country to urgently produce a slew of documents to examine the extend of price variations of medical devices in the domestic market. It has also been reminded the companies that since such medical devices are under non-scheduled drug category, their prices can be increased only up to 10 per cent of MRP annually. Those who have charged beyond this have to reduce it to the level of 10 per cent of MRP for the next 12 months.

“In this regard it has been decided to seek the following information/documents in order to examine price variation, if any, in respect of notified medical device manufactured/imported/marketed by the company”, the NPPA said.

The NPPA has issued letters to all concerned manufacturers/importers including Abbott Healthcare, Boston Scientific India, Zimmer India, Edwards Life Sciences, Johnson & Johnson, India Medtronic Corporate, B Braun Medical India, 3M India, Harsoria Healthcare and Roche Products India.

Further, Para 25 of DPCO, 2013 provides that every manufacturer /importer shall issue a price list and supplementary price list in Form V to the dealer, State Drugs Controller and the Government from time to time.

Industry perspective

The MedTech industry has welcomed the proposed Drugs and Cosmetics (Amendment) Bill especially as it recognizes medical devices as distinct from drugs/ pharmaceuticals. Further, it is important that the Bill and the subsequent Rules to be framed incorporate regulations that are harmonised with international best practices such as the International Organization for Standardization (ISO) and International Medical Device Regulators Forum (IMDRF). This effort would help medical device manufacturers achieve the highest standards of safety and efficacy, and also allow indigenous industry to prosper and become globally competitive.

Some category of products need more focus in terms of regulations and quality assurance. A case in point being that Drug Eluting Stent (DES) meant for cardiac disorder is notified but Cerebral Shunt meant for neurological disorders is not notified.

Says Sanjay Banerjee, Regional Managing Director, South Asia, Zimmer, “Risk management is a process for identifying, evaluating and mitigating risk. For medical devices, this means product safety, including risks associated with harm to people and damage to property or the environment. Risk management is an integral part of medical device design and development, production processes and evaluation of field experience.

The Indian regulatory system needs to adopt a risk-based approach to the regulation of medical devices, to ensure that Indian patients have timely access to the safest medical technology.”

The current regulatory practices for medical devices in India are ad-hoc and were issued in a knee-jerk manner in response to the Honourable Supreme Court judgement in 2005. While several efforts have been made to streamline the registration process, the genesis of the list of fourteen notified medical devices remains questionable. A risk-based classification for medical devices, along the lines of harmonized international best practices is the need of the hour.

“There is a need for incremental innovation in the medical device segment to differentiate them in terms of pricing and to meet varied demands of the Indian healthcare system. Medical device innovation need not only restrict to the invention of new devices but also to adjustments to, or incremental improvements of, existing devices and clinical practices. It can also denote efforts to adapt devices designed for use in one setting, such as a modern high-tech hospital, to be used in another setting, such as a patient’s home or at a mobile clinic or primary health centre,” Banerjee added.

Typically, medical devices are developed through continuous innovation and iterative improvements and have short product life cycles. In the Indian setting, MedTech Industry and Academia need to participate in active collaborative research and development, which encourages businesses and researchers to work together on innovative projects in select areas of therapy–from which successful incremental innovative products and services can emerge, contributing to societal welfare and also economic gain.

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