Health cess on largely indispensable imports of Medical devices @5% are only adding to the high healthcare infrastructure cost for patients that is largely funded by out-of-pocket expenses. This is also making the healthcare industry uncompetitive for the growing medical tourism. India is still dependent on the import of quality medical devices to meet healthcare infrastructure requirements. The well-intentioned move to promote local manufacturing by making imports costlier is causing more distress to the sector as there is very low sector resilience to imports.

Under IGCRD Rules, there is a provision to pay 2.5% of reduced basic customs duty in relation to manufacture of medical diagnostic equipment falling under 9018/9019/9022. This benefit is available with reference to BCD payable, if the raw materials/parts procured are utilized in the manufacture of the above-mentioned tariff goods. The said concessional duty has benefited the trade in setting up the manufacturing units like GE in the spirit of “Make in India” initiative. We propose that the said concessional duty of 2.5% be further reduced to ‘Zero’ to further enhance the ‘Make in India’ initiative and make it more attractive, thereby supporting the Atmanibhar initiative. This reduction will promote companies to develop new products and grow the manufacturing footprint in the country for the purpose of domestic and export sales. This cost reduction can be passed on to hospitals, Diagnostic Centers, etc. in domestic Tier-2/Tier-3 cities and will enhance our export capabilities.

The quality medical devices not currently available in the country must not face high duties, which will result in high cost of care and will further add burden to the healthcare economy. Therefore, import duty rationalisation must be done based on criteria like (a) products currently not manufactured in India (b) technology intensive products which require a lead time of 3 or more years to develop (c) high on investment and lower sales volumes and (d) used in diagnosis/ treatment of priority disease area (cancer, diabetes, cardiovascular disease, stroke, mortality rates etc.

Exports being the growth engine for the economy, it is important that efforts should be made to make it competitive in the international market. If we take a look at India’s export performance in the recent past, there has been a continuous decline and also impacting the balance of trade. Direct tax exemption for the export profits would attract investment to export competitive sectors and will provide impetus to the sector.

i. Establishing top-down governance structure:

Creating a Centre of Excellence (CoE), where stakeholders are able to provide thought leadership and direction to innovators to create commercially viable projects

ii. Enabling access to quality infrastructure and talent:

Geographical proximity between universities supplying high skilled talent and R&D hubs of industries

Enhancing industry-academia collaboration

Improving the education level of the workforces based on industry needs Building sustainable clinical trial infrastructure

Constructing dedicated zones or mega drug parks

iii. Creating sound and effective IP, legal and regulatory framework:

Establish transparent and predictable IP laws and policies

Facilitate knowledge transfer

iv. Ensuring availability of financing for research and purchase of medicine:

Adopt healthcare financing policies to increase availability and usage of pharmaceutical innovation

Risk sharing models are needed to incentivize PE/VC funds for making investments in high-risk life sciences R&D for long-term

Innovative financing models (e.g., debt-type instruments) need to be institutionalized by partnering with central banking organizations in the country

v. Streamline and fast-track regulatory approval process:

To boost the innovation in emerging areas such biosimilars and biologics, initiatives such as decreasing the number of authorities involved or specifying a maximum time-limit for approvals and simplifying the documentation and submission requirement, can help facilitate growth

The government Thursday said it endeavours to provide affordable quality healthcare for all while also working to boost the domestic pharmaceutical sector through 'Make in India'. As part of its efforts to give an impetus to the sector, Union Minister for Chemicals and Fertilisers D V Sadananda Gowda will meet leaders of pharmaceutical and medical devices industry to discuss policy and challenges facing the industry, during the international conference being organised in Bengaluru in February. "The endeavour of the government is to provide affordable quality healthcare for all and boost indigenous pharma sector through 'Make in India'," Gowda said while addressing media during a curtain raiser for 'India Pharma 2019 & India Medical Device 2019' here. The minister further said to boost the sector, the Cabinet has already given approval for 100 per cent FDI under automatic route for manufacturing of medical devices. The Department of Pharmaceuticals, under the Ministry of Chemicals and Fertilizers, along with the Federation of Indian Chambers of Commerce and Industry, is organising the 4th International Conference on Pharmaceutical & Medical Devices sector on February 18 and 19 in Bengaluru. Seeking to address concerns of the industry over various issues, including price control, the minister said the event would provide an opportunity to discuss government policy and challenges facing the industry. "The government is striving to make the processes in the sector as transparent and easy as possible," he added. The flagship event would bring key stakeholders of the pharma and medical devices sectors under one roof, Gowda said. The theme for India Pharma 2019 is 'Enabling Quality Affordable Healthcare' and that of India Medical Device 2019 is 'Med-Tech India: Gearing up for Ayushman Bharat'.

Prominent medical associations, including the FICCI (Federation of Indian Chambers of Commerce and Industry), and the MTAI (Medical Technology Association of India) today met the Prime Minister's Office (PMO) and presented it a series of issues relating to facilitation in the medical sector.The meeting, aimed at making India an attractive destination for investment in the sector was chaired by Principal Secretary to the Prime Minister Nripendra Misra. Other members included senior officials from PMO, NITI Ayog, Ministry of Health & Family Welfare, Department of Pharmaceuticals and Department of Revenue, an official statement said. The uniqueness of medical devices, as different from pharmaceuticals was acknowledged and the participating associations were informed that the new Medical Device Rules would be notified at the earliest. The Ministry of Health & Family Welfare also announced that the new Medical Device Act would be tabled in the forthcoming winter session of Parliament. ''No new medical devices would be notified till this new Act is passed. A detailed discussion on streamlining regulatory issues was held on which the Government assured an early action,'' the statement added. Chairman - CII Medical Technology Division, Himanshu Baid said, "An added focus on promoting exports will add value. On the other hand, continued investment in healthcare will help expand the market of medical devices increasing India's attractiveness as a manufacturing destination". "An attractive fiscal package coupled with the streamlining of regulation will help attract global investment and Greenfield and brownfield expansion in India", said Probir Das, Chairman FICCI Medical Device Forum. Industry has appreciated the proactive, progressive approach of the Government and welcomed the engagement of consultation with the industry. "We thank the Government for this opportunity to engage and enable quick resolution of Regulatory issues. This will certainly help the industry", said Pavan Choudary, Co-Chairman, CII Medical Device Division and Medical Technology Association of India. ''The Indian Medical Devices sector has emerged as a focus sector in the 'Make in India' project of the country. It has tremendous potential to grow with a huge demographic dividend on demand side and India's R&D Innovation capabilities on the supply side,'' the statement said. ''Despite the immense opportunity it remains shackled in an unpredictable regulatory environment, which is expected to change very soon and is also impeded by concerns around pharma style price control and an abysmally low market penetration, which shall need a gradual increase in public spend and awareness campaigns,'' it said.

The Federation of Indian Chambers of Commerce and Industry’s Medical Device Forum has welcomed the recent gazette notification of the Central Government that comprehensively deals with a range of concerns sought by the medical device industry.

Inconvenience

“It may be recollected that the medical device industry had been inconvenienced following discontinuity in allowing India-specific labelling after imports. Rather it was directed that all products should be labelled before imports,” said a release from the forum.

Forum members said that this comprehensive notification from the Central Government was urgently needed since the interim relief granted in March, 2014, by the Drug Controller General of India (DCGI) was to expire in September, 2014, and that this was brought to the notice of the Ministry of Health and Family Welfare and the DCG (I) by FICCI Medical Device Forum members.

Timely notification

FICCI Medical Devices Forum chairman Sushobhan Dasgupta said, “This has come as a big relief to the sector and ushers in a positive sentiment among the industry. The new notification is well timed as it will enable affordability and continued supply of medical devices to needy patients and healthcare providers.”

A consortium of international manufacturers of medical devices has asked the Centre to eliminate the need for clinical trials in India for medical devices already used in other countries for several years.

The Advanced Medical Technology Association (AdvaMed) has asked the government to tweak proposed changes in the law governing drugs and medical devices and classify devices according to the risks they pose.

The proposed amendments to India’s Drugs and Cosmetics Act are intended to cover an array of medical devices, from pacemakers to stents to intraocular lenses, which sections of the industry estimate make up an annual $3 billion market in India.

However, device industry officials are unhappy at what they say are inappropriate penal provisions in the amendments and a lack of clarity on risk categorisation of devices.

“A syringe or a stethoscope should not be treated in the same way as a cardiac stent,” said Gautam Khanna, the chair of AdvaMed India who also chairs business chamber FICCI’s panel on medical devices.

AdvaMed has asked the government to classify devices under different categories such as low risk, low moderate risk, high moderate risk, and high risk.

“Some devices in the low-risk category may not require clinical trials,” a device industry official said.

The consortium has also asked the government to reconsider the penalty provisions in the proposed amendments, which have set a fine of Rs 3 lakh and a jail term of three years for even minor violations of the law.

“There are penal provisions for mislabelling, but under the proposed amendments even a smudge on the expiry date of a device could make the CEO of a device company liable for a jail term of three years,” Khanna said. “The penalties should be progressive, linked to the severity of the violation.”

AdvaMed has also asked the government to adopt “international best practices” to ensure that the highest standards of safety and efficacy are implemented.

“We’re questioning the need for clinical trials for medical devices that have already been approved by regulators elsewhere and have been used in patients in foreign countries for four or five years,” said Vibhav Garg, vice-chair of AdvaMed.

While Indian drug laws require clinical trials to assess the efficacy of medicines on Indian patients even when the medicines have been approved in other countries, device industry officials say certain devices need to be treated differently.

“Medical devices are electrical and mechanical instruments. A product that has already proven itself for several years in another country need not be subject to clinical trials all over again on Indian patients,” Garg said.

A consortium of international manufacturers of medical devices has asked the Centre to eliminate the need for clinical trials in India for medical devices already used in other countries for several years.

The Advanced Medical Technology Association (AdvaMed) has asked the government to tweak proposed changes in the law governing drugs and medical devices and classify devices according to the risks they pose.

The proposed amendments to India’s Drugs and Cosmetics Act are intended to cover an array of medical devices, from pacemakers to stents to intraocular lenses, which sections of the industry estimate make up an annual $3 billion market in India.

However, device industry officials are unhappy at what they say are inappropriate penal provisions in the amendments and a lack of clarity on risk categorisation of devices.

“A syringe or a stethoscope should not be treated in the same way as a cardiac stent,” said Gautam Khanna, the chair of AdvaMed India who also chairs business chamber FICCI’s panel on medical devices.

AdvaMed has asked the government to classify devices under different categories such as low risk, low moderate risk, high moderate risk, and high risk.

“Some devices in the low-risk category may not require clinical trials,” a device industry official said.

The consortium has also asked the government to reconsider the penalty provisions in the proposed amendments, which have set a fine of Rs 3 lakh and a jail term of three years for even minor violations of the law.

“There are penal provisions for mislabelling, but under the proposed amendments even a smudge on the expiry date of a device could make the CEO of a device company liable for a jail term of three years,” Khanna said. “The penalties should be progressive, linked to the severity of the violation.”

AdvaMed has also asked the government to adopt “international best practices” to ensure that the highest standards of safety and efficacy are implemented.

“We’re questioning the need for clinical trials for medical devices that have already been approved by regulators elsewhere and have been used in patients in foreign countries for four or five years,” said Vibhav Garg, vice-chair of AdvaMed.

While Indian drug laws require clinical trials to assess the efficacy of medicines on Indian patients even when the medicines have been approved in other countries, device industry officials say certain devices need to be treated differently.

“Medical devices are electrical and mechanical instruments. A product that has already proven itself for several years in another country need not be subject to clinical trials all over again on Indian patients,” Garg said.

The Ministry of Health and Family Welfare will be withdrawing the Drugs and Cosmetics Amendment Bill, 2007, which is pending in the Rajya Sabha, in favour of a new amendment bill. This is part of the Government’s plans to remove medical electronics and devices from the category of drugs and give them a new classification, as well as create new regulations for them. A.K. Panda, Joint Secretary with the Ministry of Health, made the announcement of the planned withdrawal of the Bill and said the new amendment Bill would be placed before Cabinet within a few days. He was speaking at a seminar on investment opportunities in medical electronics and devices, which was jointly organised by FICCI, the Ministry of Health and Family Welfare and the Biotechnology Industry Research Assistance Council, a not-for-profit company under the aegis of the Department of Biotechnology.

Commenting on the need to segregate medical devices from drugs, he said, “The new Bill will have an entire chapter on medical devices and will help clear up many of the concerns created by the current classification of medical devices as drugs.”

Gurgaon-based medical devices firm 3M Healthcare, part of US-based 3M, today said it will operationalise its new manufacturing facility in Pune by the end of this year.

"Our second manufacturing facility will be operational by the end of this year in Pune. It will mainly produce liquids, dressing products, tapes and drapes," Healthcare Business 3M India Executive Director Gautam Khanna told PTI.

He, however, did not disclose the investment figure for setting up the plant.

Khanna was speaking on the sidelines of a FICCI event. The company had set up a R&D facility in Bangalore last year at an investment of Rs 100 crore. 3M Healthcare already has one manufacturing facility in Ranjangaon, near Pune, which it set up with an investment of Rs 100 crore.

When asked about the company's growth plans in the country, Khanna said: "3M Healthcare business in India is growing at a rate of 20-25 per cent for past few years and we expect to maintain the same growth in coming years."

The company had posted a turnover of Rs 221.48 crore for the financial year ended March 2013.

Asked about the growth drivers for the company, Khanna said: "Wound management and infection prevention will be the major growth drivers for the company".

US-based 3M has operations in more than 70 countries and employs nearly 88,000 people worldwide.

The Ministry of Health and Family Welfare is to withdraw the 2007 Drugs and Cosmetics Amendment Bill, which is pending in the Rajya Sabha, in favour of a new amendment Bill. This is part of the Government’s plans to remove medical electronics and devices from the category of drugs and give them a new classification as well as create new regulations for them.

A.K. Panda, Joint Secretary with the Ministry of Health, made the announcement of the planned withdrawal of the 2007 Bill and said the new amendment Bill would be placed before Cabinet within a few days.

He was speaking at a seminar on opportunities in medical electronics and devices, which was jointly organised by FICCI, the Ministry of Health and Family Welfare and the Biotechnology Industry Research Assistance Council, a not-for-profit company under the aegis of the Department of Biotechnology.

Gurgaon-based medical devices firm 3M Healthcare, part of US-based 3M, today said it will operationalise its new manufacturing facility in Pune by the end of this year.

“Our second manufacturing facility will be operational by the end of this year in Pune. It will mainly produce liquids, dressing products, tapes and drapes,” Healthcare Business 3M India Executive Director Gautam Khanna said.

He, however, did not disclose the investment figure for setting up the plant.

Khanna was speaking on the sidelines of a FICCI event.

The company had set up a R&D facility in Bangalore last year at an investment of Rs 100 crore. 3M Healthcare already has one manufacturing facility in Ranjangaon, near Pune, which it set up with an investment of Rs 100 crore.

When asked about the company’s growth plans in the country, Khanna said, “3M Healthcare business in India is growing at a rate of 20-25 per cent for past few years and we expect to maintain the same growth in coming years.”

The company had posted a turnover of Rs 221.48 crore for the financial year ended March 2013.

Asked about the growth drivers for the company, Khanna said, “Wound management and infection prevention will be the major growth drivers for the company”.

US-based 3M has operations in more than 70 countries and employs nearly 88,000 people worldwide.