The government of India is considering a new policy to lessen India’s reliance on high-end medical device imports. What is the need for a policy like this, and what are the main areas of focus? What is the estimated size of the medical device industry?
The government is considering a new policy to lessen India’s reliance on high-end medical device imports. Some of the recommendations include tax incentives and refunds to encourage the export of medical devices and related technology projects; increased government funding for “high-risk” medical device projects; and a single-window clearing system for medical device licensing.
In an approach paper to a draft National Policy for Medical Devices, 2022, the Ministry of Chemicals and Fertilisers’ Department of Pharmaceuticals proposed forming public-private partnerships to lower healthcare costs, increase efficiency, and improve the quality of medical devices produced in the country. It also says that prices should not be controlled by new innovations in the industry.
What is the rationale for such a policy?
Currently, about 80% of medical gadgets marketed in the nation are imported, especially high-end ones. An Indian company in the same field has traditionally focused on low-cost, low-tech items like consumables and disposables, giving foreign companies a bigger share of the market.
According to the new legislation, the government hopes to cut India’s reliance on imports from 80% to roughly 30% in the next ten years and to make it one of the top five worldwide manufacturing centres for medical equipment by 2047.
The medical devices business in India has so far been regulated by the 1940 Drugs and Cosmetics Act. The industry has long asked for a specific policy on medical devices. This is what the law says:
The government announced amendments to the Medical Devices Rules, 2017 in February 2020, which would regulate medical devices in the same way as medications are regulated under the 1940 Drugs and Cosmetics Act. This was prompted by the discovery of defective Johnson & Johnson hip implants, which exposed the absence of regulatory teeth in the medical device industry.
According to the government, the transition from partial regulation of selected medical services to complete regulation and licensing of all medical devices is underway, and is expected to be completed by October 2024. The government says that the change will require more clear communication in terms of quality assurance and certification, which will make it more difficult to understand.
The initiative also aims to boost India’s per capita medical device spending. India has one of the lowest per capita medical device expenditures, at $3, compared to the worldwide average of $47 and substantially less than industrialised countries like the United States, which spends $415 per capita and Germany, which spends $313 per capita.
What are the proposed policy’s main points of emphasis?
The draught policy focuses on incentivizing core technology projects and exports through tax refunds and rebates, establishing a single-window clearance system for licencing medical devices, identifying critical suppliers, de-risking and decarbonizing the supply chain, promoting local sourcing, encouraging cross-industry collaboration, creating a central pool of vendors and workers, and establishing a dedicated mechanism for the local industry’s engagement with international organisations.
It also suggests allocating a special budget to promote collaborative research between established industrial players, reputable academic institutions, and startups. It will also include a framework for consistent pricing regulation, ensuring that all people have access to high-quality, cost-effective medical products.
The government stated that the NPPA (National Pharmaceutical Pricing Authority) will be strengthened with adequate manpower and appropriate expertise to provide effective price regulation that balances patient and industry needs while also incorporating innovation and life cycle costs as factors in medical device pricing regulation.
The Department of Pharmaceuticals will also collaborate with industry to develop a Uniform Code for Medical Device Marketing Practices (UCM DMP). The administration has extended the deadline for public feedback on the drought to March 25.
What is the estimated size of the medical device industry?
According to the strategy paper, India will have $25 billion in medical technology businesses by 2047, with a 10–12% global market share in the medical devices sector, bringing the total industry value to $100–300 billion.
Globally, the industry is predicted to reach $433 billion by 2025, with the United States controlling 40% of the market, Europe 25%, and Japan 15%. Other rising economies, such as Thailand, where the medical device industry was valued at $27 billion and is predicted to increase by 8–10%, and Brazil, where the market is growing at a CAGR of 5.8%, are also likely to rise. The Chinese market is worth over $96 billion, and it has been increasing at a rate of above 20% for many years.
What more steps can India take to encourage medical device manufacturing?
The government has stated that India’s medical devices sector faces significant cost of manufacturing disadvantages compared to competing economies, owing to a lack of adequate infrastructure, domestic supply chain and logistics, high cost of finance, insufficient power availability, limited design capabilities, and a lack of focus on research and development (R&D) and skill development, among other factors.
It had launched the production-linked incentive scheme (PLI scheme) last year to encourage domestic manufacturing of high-end medical devices, and it had already approved manufacturing commitments worth over Rs 730 crore for devices like CT Scan and MRI machines, dialysers, anaesthesia unit ventilators, transcatheter aortic heart valves, stents, heart occluders, and others.
Edited by- Subbuthai Padma
Published by- Iram Rizvi
