Himanshu Baid, Chairman, CII Medical Technology Division

On ease of doing business and manufacturing particularly in medical devices industry not fructified in the country

I would like to mention some of the positive initiatives taken by the government in the last one year. The recent notified Medical Devices Rules 2017 which will be implemented from January 1, 2018 have eased norms for obtaining license and conducting clinical trials, and also reduced the manufacturer–regulator interface by prompting digital platform. These harmonized policies and rules for the medical devices will also encourage local manufacturing and move toward improving affordability for patients, on the other hand Kalam Institute of Health Technology –being set up at AMTZ Visakhapatnam – will be India's first institute dedicated to medical devices technologies with 100 percent financial support
(USD 125 million) from Department of Biotechnology (DBT) and the new National Health Policy 2017 aiming to provide healthcare in an assured manner to all. The
policy will strive to address current and emerging challenges arising from the ever-changing socio-economic, technological, and medical specialty scenarios.

I would also like to briefly touch upon few challenges this sector faces and need support from the government to resolve in order to survive in the MedTech industry.There are too many governing bodies with diverse requirements and standards, delay in bringing in the New Medical Devices Act 2016, there is no arbitrary price control mechanisms for MedTech products. They become a hindrance to innovation and promotion of new technology and create a push back for Make in India. Phasing out of chlorinated plastic bags, gloves, and blood bags within two years by Ministry of Environment and Forest without looking into alternatives adds to the problem. Some of these issues seriously affect ease of doing business and the investment environment for the industry.

On disproportionate reliance on imports and a complex regulatory environment in the Indian medical devices industry

Yes, medical technology is a nascent industry in India, and is described by its fragmented nature, large dependence on imports, and a complex and inadequate healthcare delivery system in the country. As our domestic manufacturing of devices and equipment is still in a nascent stage, government should have correction in inverted duty structure and tariff reduction on raw materials and inputs to boost the domestic manufacturing. The medical technology industry plays a crucial role throughout the healthcare lifecycle across the world. Our MedTech industry offers the potential to address the healthcare issues in India by using a mix of nascent, indigenous, as well as advanced technologies.

There is lack of clarity in terms of regulation. There is an urgent need of a Medical Device Authority – a separate regulatory body to look after medical devices industry only. It should be delinked from drugs and pharma. The removal of existing barriers for growth and innovative initiatives from government will ultimately lead to increased investment in India by domestic and global players alike, whether in the form of local manufacturing, fostering research and development and innovation, partnerships for skill development, among other things.

On dependence of the Indian medical devices market on imports

Yes I would say, the Indian medical devices market is still largely dependent on import, there are so many things where the government should work on, for ease of doing business.

On ease of doing business

To reduce the import dependency government should encourage manufacturing through focused incentives and infrastructural support and quick enforcement of ease of doing business measures.

Single window clearance: implement a single nodal agency – Medical Device Promotion Council or a window clearance system to coordinate across various ministries to initiate local manufacturing/research and development/regulatory for a fast track approval process. The government should come out with PPP framework based on the successful model operating in India and else ware. Government should encourage more PPP models in diagnostic space, healthcare space, and medical technology as way forward for universal healthcare.

On unfavorable duty structure

  • lFinancial incentives
  • lReduce import duty to 2.5 percent on ALL inputs needed to manufacture medical devices in India (currently it is applicable on only selected inputs)
  • lInclude medical devices in Interest subvention schemes for exports (include medical devices falling under chapter 9018)
  • lTo promote exports, merchandise exports from India scheme (MEIS) should be raised to 4 percent from the current 2 percent (like erstwhile FMS and FPS scheme)

On inadequate domestic demand for certain segments/product categories

Government should give preference to medical devices manufactured in India for public procurement. This will boost the indigenous manufacturing. Development of skills and creating a pool of skilled technicians, paramedics, and nurses for the MedTech sector will fuel domestic demand. Restriction on re-use of medical devices to ensure patient safety will boost demand and attract investment.

On absence of indigenous quality certification authority

Medical devices certification need to adhere to global-best norms, align completely to ISO 13485, and not create our own quality system which is not globally acceptable. Bureau of Indian Standards (BIS) can adopt globally accepted standards and align them with Indian requirements. Devices certification has to be in line with the certification with respect to CE marking and USFDA approval.

On role of the government for realizing the vision of it's Make in India initiative

Rather than focusing on Make in India for India, the shift should be toward Make in India for the World. Government should announce export incentives for manufacturing in India for the rest of the world and should align our regulation toward internationally harmonized standards. This will foster a respectability and acceptance of the Indian regulatory system which will help us build a global manufacturing base in India. This should also prioritize medical technology adoption on basis of disease prevalence and associated severity to promote investments.

On government efforts to fructify the MedTech industry

  • lGive cluster status to existing hubs of medical device in the country to support complex medical devices/IVDs innovation and manufacturing
  • lReinstating R&D benefits by allowing weighted tax deduction of up to 200 percent on R&D investments for the MedTech sector to promote innovation for next 5 years (currently it is being reduced)
  • lPatent examination and grant should be speeded up (within 2 years) to boost domestic innovation. Currently Indian companies lose innovation advantage due to delay in grant of patents
  • lProducts having license in generic names should be allowed to be exported without specific multiple brand approvals
  • lFree Sales Certificate to be issued by MOH instead of DGFT
  • lInterest subvention scheme for exports, capital assistance through technology upgradation fund, and capital subsidy to be extended to the MSME sector (currently applicable for investments over
    25 crore per financial year only; limit to be reduced to 3 crore)
  • lKick-start local manufacturing and R&D on the lines of the AMTZ model
  • lHealthcare Sector Skill Council to be taken as a priority
  • lSet up R&D incubation centers in premier education institutions and foster the culture of interaction of industry and academia. Propagate adoption innovative technologies developed in these institutions for scale up (exactly based on pattern of US institutions)
  • lA Government seed fund can be developed for early stage funding for innovative devices for preventive and curative healthcare to support developers through the valley of death period
  • lGovernment can create a mechanism of co-funded development programs for innovative devices for preventive and curative healthcare, targeted at attracting global innovators to create in India, in lines of the Economic Development Board funded innovation program of Singapore
  • lStable macro environment with visibility into policy which can infuse confidence in investors
  • lDepartment of Pharma and Ministry of Health should be merged so that policy and regulations stays with the relevant ministry

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