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Medical Devices Sector Faces Credibility Test as Evidence Points to Irregularities

In September, the US-based knee implant maker Stryker Corporation, entered into a settlement with the US Securities and Exchange Commission to pay USD 7.8 million for violating its corruption norms in India, China and Kuwait. This is the second time Stryker had to enter into a consent decree, wherein the party doesn’t admit to guilt but agrees to pay the penalty. The SEC’s order found that Stryker’s internal accounting controls were not sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait and that Stryker’s India subsidiary failed to maintain complete and accurate books and records.

The statements of SEC do not indicate all is well with the company’s India operations with an annual turnover of Rs 300 crore in FY18. But what is baffling is there isn’t any action by Indian regulators. Stryker couldn’t be reached for a comment. The company told Indian Express that it is committed to working with patients to make healthcare better while operating ethically and in compliance with all applicable laws and regulations. Stryker incident is just a symptom of a larger malaise that Indian healthcare system finds itself in, of which medical devices industry is a crucial piece of the cog.

Credibility at stake

Earlier this week the International Consortium of International Journalists (ICIJ) and a team of more than 250 reporters and data specialists from 58 news organizations in 36 countries, including the Indian Express filtered hundreds of cases to investigate various aspects of the medical device industry — regulation, faulty devices and corruption. The finding pointed out towards faulty implants, lack of adverse reporting, unethical marketing practices, price gouging and dubious nexus with hospitals and doctors. Names of some of the biggest medical implant giants such as Medtronics, Abbott, Johnson & Johnson, Bayer, among others that sell coronary stents to pacemakers, knee and hip implants, and pelvic meshes to intrauterine devices cropped up in those reports. All these come to light even as the industry with annual revenues of just USD 5.3 billion is poorly regulated where imported implants and devices constitute about 80 percent of the market.

For instance, the Indian Express reported several alleged irregularities in Medtronics’ cardiac program Healthy Heart For All (HHFA), ranging from bribing doctors with promotions and freebies, to pushing products to unsuspecting patients who didn’t need these products; spending crores on conferences and seminars to push products, to screening patients and prescribing devices under the same roof. Through HHFA, Medtronics is trying to reach patients who can’t afford advanced cardiac care therapies through third-party financing, which will be recovered through equated monthly instalments over a period of time. Johnson & Johnson is facing heat for selling its alleged faulty ASR hip implants in India, even as these products were withdrawn for use globally. “Our reputation is the result of our commitment to patient safety, transparency, compliance, and ethical business practices,” Medtronics said in a statement. “Thus, it would be inexcusable to ignore the overwhelming majority of instances in which our thousands of products performed exactly as intended, and the overwhelming majority of our employees who every day serve our customers with care, honesty, and integrity,” the statement added.

Medtronics said it discontinued HHFA program in 2017 due to “changing dynamics of the healthcare sector, and low visibility of the program.” Pavan Choudary, Chairman and Director General of the Medical Technologies Association of India (MTaI), the lobby group representing multinational medical device makers said the body would come out with a response in next few days after consulting the board. AdvaMed, the global medical device industry group called ICIJ reports biased. “These stories miss the bigger picture of an industry that produces hundreds of millions of medical devices annually that safely and effectively do exactly what they were designed to do,” said AdvaMed in an email statement. “These companies invest immensely in research and development and training of healthcare professionals in India to ensure improved/predictable clinical outcomes and enhanced patient safety,” AdvaMed said. “Most of the investigations are not really about the things that we didn’t know. But the details are shocking to us. They have managed to substantiate with hard facts and the data,” said Malini Aisola, Co-Convenor of All India Drug Action Network (AIDAN), group of healthcare-focused NGOs. “That really is what’s blowing everything out,” Aisola said.

Lack of specific regulatory body

At present, there isn’t any specific act to regulate medical devices in India. The Central Drugs Standard Control Organization (CDSCO) regulates medical devices under the Drugs and Cosmetics Act, which was meant for pharmaceutical products. The government early this year brought Medical Device Rules, 2017. Medical devices are quite different from pharmaceutical products with a lot of engineering, shorter product lifecycle and incremental improvements. Indian drug regulator usually follows the US and Europe regulators before approving an implant or device in India. In addition, medical devices are covered under the Consumer Protection Act and Legal Metrology Act. “The medical device rules are still under the existing drug act which is a misfit,” said Rajiv Nath, Forum Coordinator of Association of Indian Medical Device Industry (AiMeD), the body representing domestic medical device makers. Nath said two years ago the industry was promised a separate act. “We haven’t seen any consultation with stakeholders on the draft that was created by the ministry of health,” Nath added. Only 23 out of over 5000 categories of devices are regulated and that also incorrectly as a drug, he says.

Unethical marketing practices 

There is no law at present that regulates the promotion and marketing of drugs and medical devices by companies. It’s an open secret about the unholy nexus between device companies and doctors. The incentive system in form of commissions, freebies, media promotions, sponsorship of conferences and events, runs very deep in the healthcare industry. The government introduced the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) – but this was largely a guidance document for the industry, lacking the necessary regulatory teeth to have the force of law.

Adverse events

For many years India didn’t have a robust post-market vigilance system to track adverse events. The system relies on self-reporting by medical device companies for adverse events. This was a flawed model because the companies, for obvious reasons, have a conflict of interest to provide full data related to an adverse event. Materiovigilance program of India was launched in July 2015, at the Indian Pharmacopeia Commission with objectives to track the adverse events associated with the use of medical devices. But there were allegations that many doctors are reluctant to report adverse events, one is they fear getting into trouble and second is they don’t want to be excluded from the incentive-based system they have with the companies. Also, the government failed to publicize and make it simple for the patients to use materiovigilance system to report adverse events. Even if an adverse event is detected, there is no mechanism in India to fixing responsibility for an adverse outcome on a medical device maker or determining the damage caused. The patient is often left with inadequate cover against poor quality. The health ministry says its working on a formula for compensation. – Money Control