Post-pandemic India needs a rebirth of medical devices regulations

Almost no conversation in healthcare today can stay away from the gravity of Covid-19. While our normal worlds have forever been re-directed into an ever-cognizant mindset, our regulatory landscape needs to catch-up – and it needs to do that soon. India’s medical devices’ regulations especially fall under the gambit of an area that needs large reforms to ensure the wide array of country’s indigenous medical devices and their contribution toward bringing down costs of patient-care are further strengthened, if we aspire to truly Make in India and charge toward our goalpost of Healthcare for All.

With a CAGR of 15 percent, medical devices sector in India is projected to grow 3x in next 10 years. But with the country’s rising dual disease burden (NCDs are expected to comprise more than 75 percent of India’s disease burden by 2025, compared to 45 percent in 2010) and disproportionate dependence on imports (80 percent devices in the country are imported), equity in healthcare access, and availability of quality, affordable healthcare to everyone will not sustain unless backed by a thorough, mindful regulatory framework, built around guiding principles of Atmanirbhar Bharat.

The genesis of medical devices’ regulation (MDR 2017)
Until 2005, medical devices in India were unregulated. In 2006, an amendment to Drugs & Cosmetics Act (1940) was made via Notification G.S.R. 627 (E). The notification listed ten categories of products (regulated elsewhere as medical devices) to be subject to licensing as drugs before they could be manufactured, sold, or distributed in India. The notification was adopted in March 2006, and applied to both Indian and foreign firms. Subsequent years saw steady growth in both medical devices’ imports and device-friendly regulatory landscape, with 2017 being the watershed year. With a goal to provide impetus to Make in India program, the CDSCO published the new Medical Devices Rules in 2017, which came into force on Jan. 1, 2018.

In consonance with global regulations, the 2017 regulation provisioned the following decrees:

The good
Post-new regulatory framework of MDR in 2018, India jumped 30 ranks in Ease of Business survey. Medical Devices Regulations were a major contributor to that change.

From a sectoral perspective, significant growth was witnessed in medical devices trade – 24 percent increase in imports and 29 percent increase in exports.

Foreign direct investments and growth rate of imports of medical devices in India saw a significant leap as well. Notable shifts were observed during 2018-2019 in imports from Singapore and Netherlands, with the former seeing an 83-percent jump in imports to India while the latter moved up by 244 percent!

The bad
MDR 2017 was launched with a special focus to propel Make in India. The central theme of the campaign revolved around trade and employment – manufacturing cost-competitive quality products, employment genera­tion, and reduced dependency on imports as well as increase imports. However, the rule largely missed the key component – Make in India’s emphasis on export and attracting FDI. Some of these issues continue to exist today. More specifically:

• Lack of comprehensive laws and law-enforcement mechanisms for IP protection – major innovators across the globe rely heavily on patent protection of their intellectual property. In the absence of enforceable IP laws, global players lack confidence to engage in investment opportunities toward manufacturing assets in India.
• Absence of indigenous quality certification authority – when attempting to build their export portfolio, indigenous manufacturers often face huge barriers to entry as most countries either suggest an FDA- or a CE-certification, which are time-consuming and expensive certification processes. With no indigenous, trusted licensing authority recognized by MDR, indigenous manufacturers are left to scramble on their own.

The ugly
Despite all its intentions, MDR largely failed to address the key challenges the sector has faced traditionally:

• A key concern for the medical devices industry is that irrespective of the sophistication of technology, all segments/sub-segments of medical devices are governed by same regulations. For instance, most products in medium/high-technology segments have a long lead time for development and require large investments. Being low-volume products with longer return on investment cycles, such products need to be treated differently, possibly with additional incentives for development and manufacturing. In the absence of such a structure, imports are heavily tilted toward medium- and high-tech devices.
• Clinical investigation. MDR vests powerful discretion in Central Licensing Authority, whereby, in public interest, the authority can waive the requirement of clinical data for conducting clinical investigation before getting permission to conduct clinical investigation. There are no legislative guidelines as to what constitutes public interest. Concerns around misuse of such predicament have been increasingly raised.
• Absence of civil liability provisions. Violating the provisions of the Drugs and Cosmetics Act invites prosecution and imprisonment. The process of securing convictions under the Act is lengthy, not very successful, and the sentences imposed are not sufficient to act as effective deterrents. There are no provisions in the Act that allow for the imposition of civil liability in the form of penalties, or as the Johnson & Johnson hip implants cases demonstrated, no provisions in the Act that impose an obligation on manufacturers to compensate persons for harm attributable to devices (of course, claims for compensation can always be made under the Consumer Protection Act).

MD (Amendment) Rules 2020
Under Medical Devices Rule 2017, only 37 categories of medical devices (Annexure to rule 19A under 6) were regulated or notified to be regulated in near future in India. On February 11, 2020, Government of India gazetted two notifications to change that: The first (5) effectively notifying all medical devices by way of an expansive and catch-all definition of medical devices (New Definition Notification), and the second (6) requiring the registration of such newly notified medical devices on a portal (Portal) developed by the CDSCO (Registration Notification) (collectively referred to as the Notifications). Drawing on MDR’s launch, the timeline for registration of newly notified devices can be summarized as below:

Final take-away
Though the MDR and the notifications successfully address the issues of long-term licensing and lack of unified registry for all unregulated devices, they have collectively failed to deliver the promise of patient-centric approach by leaving lack of liability off the table.

Not to forget, by tying the definition of devices to drugs, it makes price-control legislation for the two indissoluble, which will continue to hurt the inadvertent price caps that affect domestic manufacturers and FDIs. It also takes away the possibility of specific provisions for devices based on their sophistication level, and thereby leaving the larger problem of import dependence unaddressed.

Until larger issues impacting labor market, consumer trust, legal liability, and intellectual property are addressed, Atmanirbhar Bharat may fall in folds of vague uncertainty, plagued by legacy issues since last eight decades of archaic devices’ regime.