Over the last decade the medical device industry has taken huge strides with promising prospects. The global medical device industry is growing rapidly, with value projected to top $ 600 billion by 2025, especially with increased access to health insurance.
As per the CII and Boston Consulting Group (BCG) report ,the India's medical devices industry is to grow beyond $50 billion. The report states that the Indian medical technology sector has the potential to touch $50 billion by 2025 if it continues to grow at 10-12 per cent annually. The report clearly states that India could capture 10 per cent of that share by 2025 if provided with adequate support and favourable policies.
The industry which covers a wide spectrum of products includes cardiovascular devices, dental equipment, diagnostic devices, medical equipment and supplies, ophthalmic devices, orthopedic devices, respiratory devices and surgical equipment to name a few. Based on the findings of CII-BCG -Vision Document – 2025 which was unveiled recently in the capital, it was concluded that the medical technology sector remains highly under–penetrated contributing seven to eight per cent of the healthcare spends as compared to pharmaceuticals at 18 per cent.
However experts feel that the key levers are required to unlock the true potential of India like a separate regulatory act for medical technology, manufacturing incentives like tax support, low cost funding to spur investments, single–window clearance to ease the regulatory burden for the industry, creation of ‘National Innovation Policy’ to reward results in innovation, world-class manufacturing infrastructure, setting up of collaborative partnerships, investing in capability development and training by setting up centers of excellence for medical technology training etc.
Industry feels that there is a need for a global task force as well to promote India as a manufacturing and R&D hub globally, along with industry sponsored programmes between local and global industry on joint collaboration projects.Industry academia collaboration to facilitate curriculum adaptation as well as cross-pollination of knowledge between students of medical technology and business management is also the need of the hour, accordingto an expert.
Revision of Schedule M-III
With a view to ensure that the Indian products are at par with international standards, the Union health ministry is contemplating to revise the Schedule M-III for medical devices under the Drugs and Cosmetics Rules, 1945 replacing the present limited Schedule M-III to address the problems of medical device industry and to make the requirements for medical devices compliant to the international standards.
The medical devices industry in the country has been airing the difficulties faced it faced in respect of implementation of the provisions of the Drugs and Cosmetics Act, 1940 and Rules made thereunder regarding the implementation of Good Manufacturing Practices. The industry has been demanding that the requirement of GMP compliance for medical devices should be as per IS: 15579: (ISO 13485) standards.
The issue of compliance of Schedule M by the manufacturers of medical devices has been raised many times in the past. The Schedule M relating to the Good Manufacturing Practices for pharmaceutical products provided in the note appended to the Schedule states that in the case of certain categories of drugs including medical devices, the licensing authority have the discretion to modify the requirements of the Schedule, if he is the opinion that having regard to the nature of the products and extent of manufacturing operations and reasons to be recorded in writing, it is necessary to relax or alter them in the circumstances of a particular case and direct the manufacturer to carry out necessary modifications in them and the modifications having been made, approve the manufacture of such categories of drugs.
As per these provisions, it is not mandatory that all the provisions of Schedule M are required to be complied by the manufacturers of medical devices. These could be modified and approved on case to case basis. The definition of the term ‘drug’ under Section 3 of the Drugs and Cosmetics Act, 1940, under clause (iv) includes such devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government.
So far the government has notified 14 categories of medical devices. They are disposable hypodermic syringes; disposable hypodermic needles; disposable perfusion sets; in vitro diagnostic devices for HIV, HBsAg and HCV; cardiac stents; drug eluting stents; catheters; intra ocular lenses; I.V. cannulae; bone cements; heart valves; scalp vein set; orthopaedic implants and internal prosthetic replacements.
Prevention of sale of substandard devices
In the absence of a separate regulation for medical devices, many overseas manufacturers introduce products in India before they are approved for sale in the country of manufacture. Frequent reports of ‘infant warmers’ catching fire happens only because of inadequate quality and safety considerations during product design and manufacturing, Sanjay Arudi, director, quality and regulatory affairs, GE Healthcare opined.
Experts strongly feel that India would need to bring in a dedicated medical devices regulation to thwart sale of substandard equipment, primarily the radiation-emitting products which increase the risk of patient lives.
Another alarming trend, is the import of used or second-hand products by third party players which sans quality refurbishment. Second-hand equipment can be particularly harmful, especially in the case of X-Ray which are radiation emitting equipment. In such devices, the radiation levels could be high and could be fatal in the long-run for both the patient and healthcare provider, he added.
US FDA has established classifications for over 1700 generic types of medical devices. However, in India, only 14 devices are currently regulated by Central Drugs Standard Control Organisation (CDSCO). In addition, X-Ray or radiation emitting devices are regulated for radiation safety by Atomic Energy Regulatory Board (AERB). Majority of devices are either imported or manufactured locally without established quality management systems.
India has a large unorganised medical devices sector. There is an apprehension about third party players undertaking service contracts for X-Ray or radiation emitting devices. The concern is that it could compromise the safety and integrity of the AERB type approval as replacement of parts could be those that are not validated and recommended by the manufacturer. In such cases, the buyer cannot be sure of the repercussions. It could be too late by the time they realise the real impact, he noted.
Indian pharma industry is regulated by Drugs & Cosmetics Act. Medical device industry was unregulated until 2005 when a handful of critical devices like catheters, endo-tracheal tubes etc. came under the purview of CDSCO. These devices are treated on par with drugs though the requirements are very different. “Clubbing medical devices with drugs is like comparing chalk with cheese which are different in nature,” pointed out Arudi.
Pressing the need for a dedicated medical devices regulations, Arudi said that it was also imperative for the government to form a Medical Devices Technical Advisory Board represented by regulators and the industry so that best global practices are incorporated. Its implementation would ensure access to products with high safety and quality standards in the Indian market, said Arudi.
Body to regulate pricing crucial
It is understood that the health ministry and the department of pharmaceuticals is contemplating to cap the prices of medical devices through the National Pharmaceutical Pricing Authority (NPPA) as there is no price control in this sector. Though domestic medical device industry is open to the idea of price control on medical devices, the Association of Indian Medical Device Industry (AIMED) insists that deliberations and strategising should be done by consumers affairs and revenue department only, rather than the NPPA.
The association contends that there is an urgent need to cap the prices of medical devices for better transparency and providing fair business opportunity for domestics manufacturers, especially in the light of competition due to uncontrolled imports of medical devices.
However they insist that NPPA could not be seen as the authority to do so, as it is the body assigned to monitor the prices of the medicines. There is already an ongoing demand for separate identity for the medical device industry thus mixing the pricing will only complicate the matter further, stressed Rajiv Nath, forum coordinator of AIMED.
The government is understood to be contemplating to cap the maximum retail price of the medical devices especially those like stents, catheters and implants etc. Through this initiative they plan to keep a check on the margins and commissions on these products, thus reducing the price of the end product substantially.
Nath pointed out, “We do agree that there needs to be some kind of policing in the price as it is not only affecting the patients but also the domestics manufactures at large. This is mainly because most of the products in this category are imported devices which even though highly priced are always recommended by the doctors widely, due to perks and commissions. Having a pricing cap will remove all this issues for domestics manufactures and open up a fair ground for competition for all.”
Nath insisted that since medical device does not fall under the purview of drugs, NPPA does not have either the expertise nor any idea about the ground realities of the industry. “Moreover, so far all our pricing related issues and problems are addressed by the consumer affairs and revenue department, so it is only feasible if the government will set a core group under them to handle the medical devices capping issues,” Nath said.
Regulating import & encouraging domestic market
With a view to address growing import and trade dependency of medical devices, domestic manufacturer's urgently wants the government to take immediate corrective measures to ensure strict compliance of the prevalent rules and regulations in the country. Experts strongly feel that only by taking these steps will the domestic industry get a free and fair ground to compete in this environment while ensuring that the consumers are also not cheated out of their money in the process.
Industry insiders point out that the medical device market in India which is over Rs 30,000 crore is mainly dominated by imports, primarily because of the lopsided import duty regime practiced in the country, with partial attitude of the retailers and hospitals towards domestic products. The Association of Indian Medical Device Industry (AIMED) observed that this is having a huge impact on the industry as they prefer using imported devices, which usually are available in unit pack that do not carry maximum retail price.
The association informed that imported goods are usually labeled only on their shelf box which enables importers to charge as per their discretion, and disturbingly in many instances importers import the goods falsely claiming them to be for institutional sales and not for sales over the retail counter. Rajiv Nath, forum co-ordinator of AIMED stressed that this is not only affecting the domestic manufacturers but also causing artificial inflation in the market affecting the end- users directly. He insisted that to bring a stop to this, the centre should ensure strict compliance of the recently updated rules and labeling requirement.
The new rules mandates printing of MRP on each unit pack of the consumer good which includes medical devices at the time of import, by deputing a port officer for checking each shipment of consumer goods as followed by drug controller of India for the pharmaceuticals. Similarly Nath stressed that the goods without MRP and claimed by importer to be for institutional sales or for government supplies should be appropriately labeled with institutional supply – not for retail sale with due justification.
“This will ensure that these goods are not diverted to retail counters for which the packaging rules should also be amended if need be. It is easier to control the problem at the originating stage with a few team of officers rather than having a large army of inspectors trying to control thousands of retail outlets and hospitals,” Nath stressed.