The Indian Department of Pharmaceuticals has published draft proposals for the creation of medical devices approval regulations, pricing regulations, and support for the development of Indian medical devices manufacturers. IHS Life Sciences does not believe the policy in its current form would serve to support the development of the industry, and that it may instead inhibit access to devices for some patients.
IHS Life Sciences perspective | |
Significance | A new draft policy on Medical Devices has been published by the Indian Department of Pharmaceuticals. |
Implications | The policy lays out plans for the establishment of a National Medical Devices Authority that would oversee the approval of medical devices in the country and drive policies aimed at developing the medical devices industry. |
Outlook | The policy, which is fundamentally protectionist, seeks to encourage the industry while limiting Indian manufacturers' exposure to international imports. Pricing controls may prove essential to maintaining access where competition is reduced. However, pricing controls can instead place pressure on manufacturers and stifle innovation. This would be where tax incentives and similar measures could come to the fore, although, with Indian government funding being constrained, it is not clear what level of government financial support could be given to the industry. Therefore, ultimately the policy in its current form may be unsuccessful at developing the industry. |
The Indian Department of Pharmaceuticals, part of the Ministry of Chemicals and Fertilizers, has published a draft National Medical Device Policy. The policy is now open for public consultation for a period of six weeks (from 3 June) for comments to be made. A copy of the policy can be accessed here.
Regulation and promotion
A key part of the proposals is the establishment of a National Medical Devices Authority (NMBA), which would oversee regulatory activities and seek to support and encourage growth in the industry. The authority would be headed by someone holding the position of joint secretary of the government of India and its leadership committee would comprise two leading physicians, two leading medical devices experts, and the secretary-general of the Quality Council of India.
On regulation, the body would establish "device testing centres" and conduct testing and evaluation of medical devices. In terms of funding, the industry is expected to fund the costs of running these institutions and their functions, though the day-to-day management may be conducted through public-private partnerships (PPP). Approval of new devices would be undertaken with the support of pre-approved existing centres of excellence, such as the Indian Institute of Technology. These centres will also support the development of new products.
Under the draft policy proposals, the authority would play a leading role in supporting growth within the industry. Included in this remit would be: the management of medical devices parks, facilitation of the removal of technical barriers to innovation, the collection and analysis of industry data, provision of a forum for the exchange of information, establishment of innovation incubation centres, and the setting up of a subcommittee known as a Skill Development Committee to consider gaps in medical devices knowledge in academia.
The policy would also have central government play a key role in supporting and incentivising the Indian medical devices industry. Potential support and policy could include a preference for medical devices manufactured in India in government tenders, subsidies, tax incentives, loans and funding, a relaxation of import duties on importation of medical devices components, and a combination of taxes and import restrictions on imported second-hand medical devices.
This component of this part of the policy is to be finalised within six months, with the Department of Pharmaceuticals being required to submit a detailed proposal for the authority, including its headquarters, budget, objectives, and mission.
Pricing
On pricing, the government is to establish pricing controls for medical devices. This may be done through a combination of legislation, potentially in the form of an inclusion of medical devices in the list of commodities controlled under the Essential Commodities Act or through a Medical Devices Prices Control Order. In order to monitor compliance with pricing regulations, the government may amend the National Pharmaceutical Pricing Authority's remit to include a separate division that will focus on medical devices pricing.
The formation of policies governing pricing is to be undertaken by the Department of Pharmaceuticals, with no clear timeline as yet for the publishing of policy, or its potential implementation.
Outlook and implications
The publication of the policy follows months of suggestions in the Indian press that the government was considering the implementation of pricing, regulation, and promotion policies. At times, draft policies in India can be quietly dropped at a late date, as happened with proposals for international reference pricing. However, in the case of its medical device policy, the Indian government has maintained a steady stream of comments to the press, perhaps serving to indicate that the policy remains a key priority for the government.
Broadly, the policy could be seen as being in line with the Indian government's policies in the 1960s to 1980s that involved Indian administrations promoting the development of the generic drugs industry in India, ultimately facilitating the country's current position as a leading manufacturer of generic medicines.
However, the world is very different from then and the policy in its current form may present some difficulties. First, it is likely to be viewed as unusual that the medical devices authority will both seek to regulate and promote the industry. Although the two objectives are not necessarily polar opposites, the body could potentially face an internal struggle in the future should it need to implement product guidelines where a side effect of the guidelines would be negative for the development of the industry.
Although import restrictions or preferences in tenders might prevent competition to products made in India, they may serve to limit competition in the market, which in turn could have an impact on prices (of devices not placed under pricing controls) or the availability of new devices. For example, every year many poor Indian patients requiring pacemakers receive imported, donated second-hand devices from regulated markets where they cannot be reused. Although second-hand devices such as these may present a safety risk to patients, this risk is often deemed less than the risk of not receiving a pacemaker – a real possibility for poorer patients who cannot afford new devices.
Access could be guaranteed by pricing controls. Where these pricing controls would be imposed remains unclear. The government may be aiming at wholesalers, whose mark-ups attracted widespread media attention in May when the Maharashtra Food and Drug Administration suggested that some imported cardiac stents may be retailing with a 300–700% wholesaler/distributor mark-up (see India: 20 May 2015: Study indicates 300–700% distributor and hospital mark-up on cardiac stents in Indian state of Maharashtra). Wholesalers have a wide range of choices with regards to what they import. It remains important to maintain some degree of incentives for wholesalers, otherwise India could experience a repeat of the supply delays that occurred when distributors boycotted drugs placed under the 2013 Drug Price Control Order in favour of those not under pricing controls (see India: 7 November 2013: Drug distribution delays continue due to pricing margin dispute in India). Should the pricing controls fall on manufacturers, they might serve to limit profitability in the sector, stifling available funds for research in a field that is very research driven and at a time when the industry is adjusting to new enhanced regulatory requirements. A balance can be struck by providing tax incentives and similar measures, but, with the Indian economy souring and government expenditure remaining constrained, unless medical devices are very high on the government agenda, the industry could find itself backed into a corner.
Therefore, on balance, in its current form and based on the current market in India, IHS Life Sciences remains sceptical that the policy would serve to promote access to medical devices and develop the industry.