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Avoid protectionist barriers in medical devices sector: Varun Khanna

Govt should recognise the importance of innovation in meeting India's overwhelming healthcare needs

Varun Khanna, chairman, AdvaMed India
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Varun Khanna, chairman, AdvaMed India
Varun Khanna
Last Updated : Jan 17 2017 | 2:00 PM IST
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If India wants to be globally competitive and become more self-sufficient, it should send a positive message to global investors that it is ‘open for business’. While seeding the environment for domestic competitors by increasing demand (expand insurance); the Union budget should have provisions that incentivise overall manufacturing and investment - including lowest possible tariffs on raw material & components, promotion of research & development, skill development, greater health expenditure or better insurance coverage, low regulatory costs, assurance of predictable policy. This will benefit the cause of Make in India rather than raising custom duty (increase that is eventually passed on to the patients).

For example, the Finance Ministry’s move to raise import tariffs on medical devices in January of 2016 will not only further restrict penetration of medical devices in the country, but also act as a deterrent to the ‘Make in India’ campaign in terms of attracting Foreign Direct Investment (FDI) in the sector, as India will be seen as a market that does not offer economies of scale. Since the local manufacturing of devices and equipment is still in a developmental phase, the government should not discourage imports by raising the duties as has been done. The custom duties should be reduced particularly on devices not currently manufactured in India and diagnostic devices.

In addition, the Department of Pharmaceuticals issued a notice indicating that it is considering a Preferential Market Access policy for medical devices and also thinking of imposing content requirements for medical devices. All these steps send negative signals to the innovative manufacturers and investors. 

Bolstering indigenous production 
The manufacture of medical devices should be a special focus under the current ‘Make in India’ program. Financial incentives such as tax holidays should be extended to manufacturers and their products.

In short-to-mid term, rescind import tariff hike (but retain tariff reduction on raw materials and inputs). For mid-to-long term solution work with global and domestic stakeholders to identify positive incentives and policy measures that will attract investment and innovation.       

Offer operational ease of doing business
The regulatory policies need better harmonisation with global regulatory practices and ensure provisions that do not hinder operational ease of doing business for innovative device companies to invest and operate in the country. For instance, introduction of too many compliance features for increasing scrutiny in the latest draft of medical device rules will lead to delay and increase in procedural cost that will ultimately hamper access to patients. A better approach would be to have checkpoints/systems in place that you are automatically driven to compliance. 

In drafting the latest draft medical device rules, the ministry has adopted the GHTF guidance essential principles but at the same time also picked from regulatory practices followed in other countries like FDA, PMDA etc. However, the device sector will have more clarity and predictability, if the time tested vital elements of essential GHTF principles along with risk based classification, form the backbone of rules. 

The additional requirement for clinical investigation of medical devices already approved in GHTF countries and third party audit shall cause unnecessary delay in the availability and access of innovative medical devices to the HCPs and the patient population. 

Moreover, the provisions with respect to labeling of medical devices should be aligned with the Draft rules published in July 2016, and the clause with respect to the shelf life of medical devices should be amended to be in line with global requirements.

Separate regulatory framework for medical devices
The Drugs and Cosmetics Act, 1940 treats devices at par with pharmaceutical products and the rules, regulations and policies for pharmaceuticals are applied to medical devices by agencies and government officials that come from a pharmaceutical mind frame and education background. This leads to an unpredictable regulatory environment that is inconsistent with global norms for regulating medical devices. 

For short-to-mid term solution, amend the Drugs and Cosmetics Act to include a new globally harmonized definition of a medical devices and in vitro diagnostics (IVDs) removing any reference to medical devices under the drugs definition. Also, work with the global medical devices industry and relevant stakeholders to finalise the Medical Device Rules, 2016 ensuring that all provisions are harmonized with global best practices.

For long term solution, introduce and pass a new Act for Medical Devices that sets out a comprehensive and high-level framework for the regulation of medical devices.   

Drive innovation 
The government needs to recognize the role of innovative and quality devices in meeting the overwhelming healthcare needs of India’s population. Therefore, it should consider innovation and new technologies for medical devices depend upon the patients’ needs. 

The government should promote an innovation driven ecosystem. Governments around the world are exploring policy measures to attract investment and promote sustained innovation. The government in India too should take a realistic view and embrace innovation. For this, the union budget should provide diverse solutions from the inside and welcome global medical device manufacturers who can conduct R&D, invest and partner with local innovators. The med tech sector is still in its nascent stage and therefore in order to meet the growing needs of the Indian patients it’s important to build an ecosystem that encourages and rewards medical innovation. 

To make healthcare more accessible to the patients the focus should be on improving primary healthcare. The infrastructure should be strengthened by investing on more quality tertiary care centers for patients and supply chains for better healthcare delivery.
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Varun Khanna is the chairman, AdvaMed India Working Group & executive committee, and MD, BD India & South Asia. Advanced Medical Technology Association (AdvaMed), which represents the medical devices industry, focuses on advancement in medical technology
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First Published: Jan 17 2017 | 1:51 PM IST

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