Medical Device Industry in India: Registration, Licensing and Schemes Available

Introduction

Recently the law in India for medical devices has been amended for ensuring higher quality and better safety methods to be incorporated in this industry. This new amended law is applicable to every medical device in the country as opposed to a just 37 medical device categories which was the case earlier.

The Government of India has therefore gazetted two notifications on February 11, 2020, declaring a new definition for all medical devices manufactured in India through The Medical Devices (Amendment) Rules, 2020. The consequence of these two major notifications is to make sure that all medical devices shall now be purchased with the stamp of the highest quality and safety measures and which shall be effective from 1st April, 2020. Furthermore, according to this Government notification as on 1st April, 2020, every medical device which comes within the category of the definition hat has been given below shall be regulated as a “drug” under the Drugs and Cosmetics Act, 1940 and the Medical Device (Amendment) Rules. The definition is given as follows:

“All devices including an instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including a software or an accessory, intended by its manufacturer to be used specially for human beings or animals which does not achieve the primary intended action in or on human body or animals by any pharmacological or immunological or metabolic means, but which may assist in its intended function by such means for one or more of the specific purposes of ― (i) diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder; (ii) diagnosis, monitoring, treatment, alleviation or assistance for, any injury or disability; (iii) investigation, replacement or modification or support of the anatomy or of a physiological process; (iv) supporting or sustaining life; (v) disinfection of medical devices; and (vi) control of conception.”

Important Regulations for ensuring quality of Medical Devices in India

• It is the obligation of all medical devices to abide by the guidelines and provisions given under the Drugs and Cosmetics Act, 1940 in order to get an assurance and approval for its standards of quality as well as the safety for its usage. However, these provisions and guidelines are applicable only to those medical devices that have been notified by the Government as “drugs” that has also been defined as “notified medical devices” under the Act.
• Further, certain important quality requirements have been stipulated by the Drugs and Cosmetics Act, 1940 (“DCA”) under the Medical Devices Rules, 2017 (“MDR”). These need to be necessarily followed by every marketer, importer, manufacturer, and seller of medical devices in the country, as has been notified by the government.
• It is the duty of the DCA and the MDR to make sure that the standards of quality and safety of these notified medical devices are up to the mark and at every level of the supply chain. This can be achieved through the enforcement of a mandatory license which needs to be acquired by the importer or the manufacturer of such medical devices. Hence, every importer, manufacturer, seller etc. of all such government notified medical devices have to necessarily acquire the requisite license from the licensing authority prior to undertaking any commercial activity involving the use of such medical devices.
• This license shall only be issued after thorough quality checks have been conducted for ensuring the safety of these devices for future usage. Furthermore, the business premise of this license owner can also be subjected to inspections from time to time. It is also necessary for the license holder to maintain detailed records pertaining to every sale and purchase of any such medical device.
• Registration and its requirements
• All the importers as well as the manufacturers who produce such newly notified medical devices must register with the Drugs Controller General of India (“DCGI”) before October 1, 2021, which is the deadline.
• After this, the DCGI begins its acceptance of applications for registration via an online portal known as the “Online System for Medical Devices” which is effective from 1st April, 2020.
• However, till now there has been no time frame which has been stipulated for processing these applications which are required for registration under the DCGI. As of now the process is that the registration will need to be done immediately after the submission of all the documents and other required information through the online portal. This submission occurs without the examination of any of the information submitted by the applicants to the DCGI.
• It is however important to note that this registration process is much simpler and cannot be compared with other marketing registration and authorization processes. All importers and manufacturers of these newly notified medical devices shall be eligible for acquiring the registration upon the submission of the following documents:
  1.    Name of the company or firm or any other entity
  2.    Name and address of manufacturing site (for devices manufactured in India only)
  3.    Specification and standards of medical device (for imported devices only)
  4.    Details of medical devices (Generic Name, Model No., Intended Use, Class of Medical Device, Material of Construction, Dimensions (if applicable), Shelf Life, Sterile or Non-sterile status, Brand name only if registered under India’s trade mark law)
  5.    Certificate of compliance with respect to ISO 13485 standard accredited by National Accreditation Board for Certification Bodies or International Accreditation Forum in respect of such medical device
  6.    Free sale certificate from country of origin (for imported devices only)
  7.    A duly signed undertaking stating that the information furnished by the applicant is true and authentic
• Furthermore, this registration shall stand concluded only when the registration number has been generated.
• Under a situation wherein any importer or manufacturer is not able to acquire the due registration for his newly notified medical device prior to the deadline of, October 1, 2021, then such an importer or manufacturer will not be eligible or permitted to market and sell his medical devices in India until registration for the same has been acquired.

Declaration of label for the registration number

All manufacturers and importers who acquire the registration number for their medical devices are necessarily required to display such a registration number over their medical device upon its label. This requirement for the display of the registration number is not related to the deadline for registration which is 1st October, 2021, however, it is an immediate requirement and shall be imposed as soon as the registration number is issued, unless otherwise mandated by DCGI.

Process after the acquisition of Registration and Labelling

• After the registration is done, a certificate of compliance with ISO-13485 (required for all Medical Devices – Quality Management Systems – Requirements for Regulatory Purposes) shall be mandatory for registering all such newly notified medical devices.
• Thus it becomes the duty of the importer or the manufacturer to ensure that all the requirements pertaining to ISO 13485 are complied with at all times. This implies that ISO 13485 requires the creation, documentation and implementation of a quality management system that will be supplemented through independent audits whenever required.
• Once an importer or manufacturer registers this medical device, he is obliged to be strictly compliant with the quality management system which is mandatorily required to be followed.
• In case any discrepancy is discovered during the implementation of such a quality management system by the DCGI, they reserve the right to suspend or cancel the registration of the medical device as well.  This will be followed by an order of suspension or cancellation of registration of the specific medical device which shall prevent the importer or manufacturer of the said medical device to further import or manufacture this medical device.

License acquisition requirements

• The importers and manufacturers of any such newly notified medical device are required to obtain the license provided by the MDR before the stipulated due date and from the requisite authorities.
• However, it has also been provided that it is not mandatory to obtain a registration number in order to acquire the license. Thus any application for a license can and should be made any day after 1st April, 2020 or any other date as prescribed by the DCGI.
• Further is this license is acquired way before the due date, then there shall be no obligation upon the manufacturer or the importer to abide by the needs of the MDR over the grounds that such a license has been obtained. Furthermore, the supply chain of the said device shall also or require any license because of the medical device importer or manufacturer having applied and received a license.
• But, in case the deadline gets over then each and every compliance given under the MDR which included the need to obtain the license by a certain specific period of time must be met. Moreover, all the required inspections of the warehouses and the manufacturing premises must also begin only after the prescribed deadline has been surpassed.

Repercussions of non-registration or of not acquiring the license before the deadline

• Under a situation wherein an importer or a manufacturer of the newly notified medical device, fails to acquire the registration prior to October 1, 2021, then they will have to cease the import or manufacture of such a medical device up until the registration for the same has been acquired.
• Furthermore, it will be easy for the DCGI or State-level Licensing Authority to know in case a medical device is manufactured or imported without its registration having been acquired. Under the Legal Metrology Rules, 2011, every importer and manufacturer of any medical device (whether regulated or unregulated) is required to declare the date of import of such a medical device or the date of manufacture of the medical device over its label.
• Thus where a declaration exists over the label of a medical device that the same has been imported or manufactured on or after October 1, 2021, however, the label does not show a DCGI registration number, then it shall be confiscated by the DCGI or any appropriate state-level licensing authority and the rightful action for the same shall be undertaken against the importer or manufacturer therein.
• Moreover, any violation of the MDR including the failure to obtain a registration or license before the stipulated deadline could result in criminal prosecution which in turn results in an imprisonment or a fine. Any stock of medical device that is sold without registration or license shall also be confiscated due to this.

Schemes for Promotion of Medical Devices Manufacturing

The Government of India has identified the medical devices industry as one of the most important sectors making it a priority industry for its flagship 'Make in India' program and hence it is committed to strengthen the manufacturing ecosystem within this. Our country is the fourth largest medical device market in Asia and as of today, the Indian market still has a high reliance over imports. However, recently, the exports have seen a surge since the ‘Atma Nirbhar’ Bharat mission is providing an impetus to India’s vision of becoming a global manufacturing hub for medical devices. Certain measures for instance, The Production Linked Incentive Scheme (PLI) and Promotion of Medical Devices Parks Scheme, are a testimony to this vision. Both of these schemes have been made in a manner such that there is large scale incentivisation for manufacturing and for building of the necessary infrastructure for the development of manufacturing clusters within India.

Scheme for Promotion of Medical Device Parks

• India’s medical device industry is very capital intensive coupled with a long gestation period which requires development and induction of new technologies within it. This also requires the constant training of health providers in order to adapt to new technologies. Almost all the hi-tech innovative products originate from a well-developed ecosystem and innovation cycle which is yet to be fully developed.
• The creation of testing and laboratory facilities requires large investments and thus, a scheme known as the “Promotion of Medical Device Parks” has been approved by the Government of India on 20th March 2020.
• These parks shall provide common testing and laboratory facilities and centres at one place which in turn will reduce the manufacturing cost significantly and thereby help in the creation of a robust ecosystem for the medical device manufacturing system in the country.

Objective

• Easier accessibility to all standard testing and infrastructure facilities through the creation of world class common infrastructure facilities designed to increase the competitiveness which in turn shall result in the significant reduction of the cost of production for medical devices leading to better availability and affordability of medical devices within the domestic market in the country.
• Further reaping the benefits arising due to the optimization of resources and economies of scale.

Scope

The financial assistance under the scheme shall be provided for the creation of common infrastructure facilities within four Medical Device Parks as proposed by the respective State Governments.

Financial Assistance

• All financial assistance to a selected Medical Device Park would be 70% of the project cost of the common infrastructure facilities. In case of North Eastern States and Hilly States (Himachal Pradesh, Uttarakhand, Union Territory of Jammu & Kashmir and Union Territory of Ladakh) financial assistance shall be 90% of the project cost.
• The maximum assistance under the scheme for one Medical Device Park would be limited to Rs. 100 crore.

Linked Incentive Scheme for Promoting Domestic Manufacturing of Medical Devices

• Domestic medical devices market in India is heavily dependent on imports which contribute to more than 85% of the market. The medical devices manufacturing sector faces in India lack of a level playing field vis-à-vis competing economies. The medical devices manufacturing sector suffers from a considerable cost of manufacturing disability, among other things, on account of:

1. lack of adequate infrastructure, domestic supply chain and logistics.
2. high cost of finance
3. inadequate availability of quality power
4. limited design capabilities
5. low focus on R&D and skill development

In order to deal with the issue of the disabilities within the manufacture of medical devices in India along with other major manufacturing economies, a scheme called “Production Linked Incentive Scheme for Promoting Domestic Manufacturing of Medical Devices” has been approved by the Government of India on 20th March, 2020.

Objective:

• The Scheme intends to boost domestic manufacturing and attract large investments in the Medical Devices Sector.
• Scope:
• Under the Scheme, financial incentives shall be given to selected companies based on threshold investment and incremental sales (over Base Year) of medical devices covered under target segments.

Quantum of Incentive:

• Under the Scheme, financial incentive shall be given to selected companies at the rate of 5% of incremental sales (over Base Year) of goods manufactured in India and covered under Target segments, for a period of five (5) years i.e. from FY 2021-22 to FY 2025-26.
• Eligibility
• Financial incentive under the scheme shall be provided only to companies engaged in manufacturing of goods covered under target segments in India.
• Eligibility shall be subject to thresholds of investment and incremental sales of manufactured goods (covered under Target Segments) over Base Year.
• An applicant must meet all the threshold conditions to be eligible for disbursement of incentive.
• Eligibility under Production Linked Incentive scheme shall not affect eligibility under any other Scheme and vice-versa

Conclusion

The need for obtaining registration as well as the requisite requirements for labelling has been predicted over a long period of time and hence was long overdue because the Government had published a draft of these notifications in October last year itself.

This has ensured better regulation of the medical device industry in our country and especially considering the global situation at present, this has become even more important now than it was even a few months ago. The Government has now given sufficient time for the industry to adopt ISO 13485 and obtain registration for all unregulated medical devices. It is now the obligation of this industry to do its part and reinforce the belief of the Indian consumers and the international community in the quality and safety of medical devices used in India for all such medical purposes.