Centre’s Rs 500 crore medical device scheme to have a multiplier effect

Centre has released the operational guidelines for the `Strengthening of Medical Device Industry (SMDI)’ scheme.

The Department of Pharmaceuticals (DoP) has merged two sub-schemes including Assistance to Medical Device Clusters for Common Facilities and Human Resource Development in Medical Device. The schemes have become part of SMDI with modifications in the scheme guidelines and reduced financial outlay.

The new scheme aims to promote the Medical Device Industry by bringing industry leaders, academia, and policymakers together to share their knowledge and experience for the overall development of the sectors. Financial support will be provided to industry bodies/associations and educational institutions to conduct meetings/ seminars/ workshops/ events/roadshows/expos etc. for which grants will be provided by the department. Also, support for manufacturer evaluation studies, creation of databases, international study missions, etc. will be provided for the promotion and development of the medical device industry. The department may also directly incur expenditure on industry development activities.

The scheme, with an outlay of Rs. 500 crore and tenure of three years from Financial Year 2024-25 to FY 2026-27, is expected to have a multiplier effect in augmenting the domestic manufacturing capacities with a significant reduction in imports and promote quality, human resource development, safety and efficacy of medical devices, and also enhance the depth of medical device value chains in the country.

DoP said due to efforts of the government in the last decade in creating a suitable eco-system and incentivizing the production of medical devices through the PLI scheme, the production of technology-intensive medical devices such as CT scans, MRI, C-arm, etc. has started in India.

“However, the dependence on imports continues to be about 70%. Moreover, to deepen our manufacturing capability along the value chains of different segments of medical devices, it is essential to incentivize domestic manufacturing of key components/raw materials/accessories, etc., along with Medical Devices under the list of medical devices for which exemption from the instructions of Department of Expenditure for Global Tender Enquiry are available owing to lack of domestic manufacturing to meet the requirement of procurement of central government hospitals, by providing support to industry in form of grant for marginal investment. Another challenge faced by the domestic medical device industry is the high cost of clinical investigations, which dissuades them from investing resources in R&D and manufacturing facilities, which can lead to newer product development, better safety, and efficacy of devices, and enable access to markets abroad. As a nascent industry, the sector also requires support for awareness generation, knowledge sharing, and promoting brand India. Availability of industry-ready trained manpower is another constraint the industry faces,” it said.

To address these issues, after a series of consultations and two Meditech Stackathons- a massive exercise involving about a hundred manufacturers to identify industry issues and map value chains across eight medical device segments, the Department of Pharmaceuticals has formulated a scheme for strengthening of medical device industry. The scheme has five components:

• Common Facilities for Medical Device Clusters
• Marginal Investment Scheme for Reducing Import Dependence
• Capacity Building and Skill Development in Medical Device Sector
• Medical Device Clinical Studies Support Scheme
• Medical Device Promotion Scheme

“Medical Device Industry needs specialized inputs /components in manufacturing of Medical Devices. These cannot be produced by the general industry and are often imported by medical device manufacturers. They can be incentivized through grants for the manufacturing of essential/key components upstream materials or accessories or closely related products used in the manufacturing of medical devices. Presently concerning 354 medical devices, exemption from the instructions of the Department of Expenditure for Global Tender Enquiry (GTE) for tenders of value below Rs. 200 crore is available owing to the lack of domestic manufacturing of these devices to meet the requirement of procurement of central government hospitals. Marginal Investment Support for manufacturing of these medical devices within the country would lead to a reduction in the import of these items,” DoP said.

The department will provide financial support in conducting clinical investigation/clinical performance evaluation/Post Market Follow-up Study/animal studies to the eligible applicants as referred to in clause 5.3, in the form of a grant on a reimbursement basis as per the following criteria:

• Pre-Clinical Studies – Rs. 2.0 crore or 25% of the expenditure incurred, whichever is less;
• Clinical Investigations – Rs. 5.0 crore or 25% of the expenditure incurred, whichever is less;
• Post Market Clinical Follow-up – Rs. 1 crore or 25% of the expenditure incurred, whichever is less;
• Performance Evaluation of new IVDs – Rs. 1 crore or 25% of the expenditure incurred, whichever is less;

Technical Committee will be constituted by DoP to technically appraise proposals received under different components of the scheme, and provide technical guidance and recommendations to the Scheme Steering Committee (SSC) in the discharge of its functions. The TC may also give its comments on any technical matter referred by PMA/DoP.
MB Bureau