The Indian medical device industry is set for a major shake-up as the central government plans to bring all medical devices under the definition of drugs to regulate their manufacture and trade. The low-value high-volume segment of Indian medical device industry, including consumables and patient aids, will face the maximum impact.
"Thousands of small and micro units will have to shut down, and imports will become multiple times costlier, turning medical devices expensive for consumers", says Pradeep Chawla, President, Surgical Manufacturers and Traders Association (SMTA). About 80-90 per cent of the medical device suppliers in Asia's largest wholesale market, Bhagirath Palace, Delhi, will find it impossible to comply with the new regulations, Chawla adds.
Invest India, the national investment promotion and facilitation agency, estimates the size of Indian medical device industry to be worth $5.2 billion, with a potential to grow to $50 billion by 2025. While diagnostic imaging sector, largely dominated by big players, constitutes 36 per cent of the market, consumables and patient aids could be another 28 per cent, Invest India estimates.
What has triggered the uproar is a draft notification issued by the health ministry on October 18 to bring all medical devices under the purview of the Drugs and Cosmetics Act, 1940. All devices, including instruments, apparatus, appliances, implants, material or other articles, whether used alone or in combination, including software or an accessory, for purposes of diagnosis, prevention, monitoring, treatment, investigation, disinfection, etc, will come under the ambit of the health ministry regulation under the proposed directive. To begin with, the apex drug regulator, the Central Drugs Standard Control Organisation (CDSCO), has stated that four such devices - digital thermometer, nebuliser, blood pressure monitoring devices and glucometer - will be regulated under drugs Act from January 1, 2020.
"By bringing these devices under the drugs Act, very onerous licensing norms would be applicable on their sale, import and manufacture and stock. Even if you have to sell a digital thermometer, a retail shop will now have to hire a pharmacist. Such requirements are quite baseless as pharmacists have no experience or technical knowhow about these electro-mechanical medical equipment. Moreover, cost of compliance would spiral in terms of product registration fees, annual testing and licensing fees along with regular inspections by state drug control departments. It will monopolize trade and sound the death knell for lakhs of standalone surgical shops," says Puneet Bhasin, Secretary, SMTA.
The notification will also make import of such devices costlier as CDSCO's licence fee for imported medical devices is 28-140 times higher than that of locally produced devices. While the price differential could be an incentive for local manufacturing, the area, clean room and other infrastructure requirements that are pre-requisite to avail manufacturing licences will make it an expensive affair, thereby making it unviable for micro and small enterprises.
Industry players say the number of products that can be covered under the new definition of medical device could run into several thousands, if not a couple of lakhs. "A separate Medical Devices Act should have been brought in first to regulate medical equipment as most of these devices are neither invasive nor sterile nor implantable. Regulating these products in the same manner as that of medicinal drugs would not be in the right spirit and would cause unnecessary burden and hardship to manufacturers and traders and also to the general public which would be forced to bear the high cost of compliance. This is more likely to benefit large corporate that have the wherewithal to manage licences, huge manpower costs and deep pockets to sustain losses," the association leaders say.
SMTA has already approached the Delhi High Court to seek a stay on the government decision. The court is to hear the petition on December 11.