India - Medical Devices Policy, 2023 – A Vision To Streamline Regulation, Incentivise Domestic Manufacturing And Facilitate R&D.

In a bid to reduce import dependency and boost domestic production of medical devices, the Union Cabinet recently approved the National Medical Devices Policy, 2023 (“Policy”)[1]. The broad contours of the Policy were earlier notified vide a press release issued by the Press Information Bureau (“Press Release”).[2] The Policy aims to reduce India’s import reliance and has a stated goal to establish India as a global manufacturing hub for medical devices. This announcement comes at a time when the Government is actively promoting the ‘Atmanirbhar Bharat’ and ‘Make in India’ initiatives.

With the bulk of medical devices in India being imported, this Policy is aimed at increasing self-reliance, resilience, competitiveness and innovation in the country’s medical devices industry. Besides aiming to acquire 10-12% share in the global market for medical devices over the next 25 years, the Policy also accounts for domestic manufacturing of sophisticated, high value and high-end medical devices such as CT-Scan, MRI Scan, C-Arm, Linear Accelerator, Mammogram and high-end X-ray tubes. The Policy lays down a set of ‘missions’ which it aims to achieve in order to facilitate growth of the medical devices sector. These include access & universality, affordability, quality, patient-centred & quality care, preventive & promotive health, security, research & innovation, and skilled manpower. These goals are proposed be accomplished by focusing on the following core areas:

1. Regulatory Streamlining

Presently, the licensing framework for medical devices is spread across several legislations, guidelines and policies (including the Medical Devices Rules, 2017 and Drugs and Cosmetics Act, 1940), and is governed by a host of regulators including the Central Drugs Standard Control Organisation, National Pharmaceutical Pricing Authority and State Licensing Authorities. Additionally, some specialty devices like radiological equipment are also under the purview of authorities such as the Atomic Energy Regulatory Board. It is fair to claim that the current regulatory landscape is complex, which inhibits business. To address this issue, the Policy alludes to the creation of a ‘Single Window Clearance System’ for licensing of medical devices, to minimise duplication of efforts and compliance burdens. Additionally, the Policy speaks of gradually expanding the role of Indian Standards like BIS (as well as harmonising the same with international standards to maximise safety and quality of medical devices), alongside formulating a coherent and consistent pricing regulation to maintain affordability and patient protection. A dedicated regulator perhaps?

The Policy clarifies that it seeks to achieve global competitiveness by enhancing standardisation, certification and quality standards. While the Policy does not stipulate exactly how this will be achieved, the Approach Paper to National Medical Device Policy, 2022[3] (“Approach Paper”) (which was based on similar principles and furthered the same goals as the present Policy) provides some indication to this effect. It suggests that such competitiveness can be achieved by adopting Global Medical Devices Nomenclature (GMDN) or Universal Medical Device Nomenclature System (UMDNS); using International Test Reports for product compliance; and enforcing regulatory compliances of market-ready products from the design/ research phase itself, thus aiding development and facilitating quicker approvals. Although it is not certain that these same measures will be adopted under the new Policy, given the striking similarity in goals and objectives, it would not be surprising if this were to eventually be the case.

Additionally, the Policy refers to the establishment of an institutional arrangement for aligning the National Medical Commission regulations, industry code of ethics, etc., to ensure and enforce ethical marketing of medical devices.

2. Enabling Infrastructure

The Policy seeks to expand the presence of medical device parks and similar clusters, particularly near the economic zones, to enhance connectivity and infrastructural capabilities, and to facilitate smooth convergence and backward integration with the medical device ancillary industry. This is in line with other initiatives of the Central Government including the National Industrial Corridor Development Program,[4] PM Gati Shakti,[5] and the National Logistics Policy, 2021.[6]

The establishment of concentrated clusters of testing centers/ laboratory facilities/ warehousing/ manufacturing units is expected to reduce manufacturing cost, improve quality especially of high-end medical devices, improve affordability and accessibility of medical devices domestically, and facilitate a broader ecosystem wherein domestic production of medical devices can thrive. This is expected to take place alongside expansion of testing and certification facilities for medical devices, which will ensure quality, safety and efficacy of medical devices in the country. Further, the Policy progressively envisages a phased manufacturing model for critical components to ensure uninterrupted availability of medical devices without any supply chain disruptions, thereby boosting domestic manufacturing.

3. Facilitating R&D

The Policy aims to support and complement the “Draft Policy to Catalyse Research & Development and Innovation in the Pharma-MedTech Sector in India”.[7] The Policy, (read with the Press Release) seeks to achieve this by promoting R&D and creating an ecosystem for indigenous innovation in the medical devices industry through inter alia,industry-academia collaboration. For this purpose, the Policy is expected to promote innovation with ‘atmanirbhar’ technology products, along with supporting start-ups and establishing Centers of Excellence, ‘plug and play’ infrastructure, innovation hubs, clinical settings, and 5G use labs. This may be done through establishment of a dedicated fund (since the Policy alludes to setting up of funding agencies) for supporting R&D in domestic manufacturing of medical equipment. Additionally, in order to maximise commercialisation and utilisation of government aided inventions, converging the resources available with institutions like AGNIi, Start-up Mission, BIRAC, etc. will also be a core area of focus.

4. Attracting Investments

The Policy seeks to encourage private investments, venture capital (“VC”) funding, as well as public-private partnerships to achieve its objectives. As per the Policy, this may be done through active outreach engagements such as inviting VCs to screen start-ups to incubate, as well as through promoting new financing models like blended finance having a mix of public and private funds. The Policy will further complement the Start-up mission of the Department for Promotion of Industry and Internal Trade, and implement the same with a targeted focus towards the medical devices sector. This will take place alongside leveraging of schemes like the Public Procurement (Make in India) Policy and Ayushman Bharat program.

5. Human Resource Development

The Policy envisages several measures to ensure a steady supply of skilled workforce across the innovation value chain like health experts, technicians, scientists, regulators, etc. This includes the skilling, upskilling and reskilling of professionals as well as certification of professionals in the medical device sector; integrating skilling courses and activities with the National Skill Qualification Framework and the Skill India Portal respectively; forging relationships with foreign organisations to create medical technologies at a competitive pace; setting up multi-disciplinary courses for medical devices to enhance MedTech human resources and secure availability of skilled personnel for development of high-end medical equipment; and formulating a National Database of the various skills required with regards latest manufacturing technologies in the MedTech sector. This is especially important since the lack of skilled workforce has hampered indigenous growth of the medical devices sector in India.

6. Brand Positioning and Awareness

A significant portion of the country’s population remains unaware of the developments and standards for medical devices and medical electronics in India. To address this issue, the Policy envisages the establishment of an Export Promotion Council dedicated to the medical devices sector. In fact, the office memorandum issued by the Department of Pharmaceuticals on December 5, 2022,[8] reflects that the government has already taken steps to initiate formulation of the council. Under the Policy, the council is expected to initiate studies and projects to learn from best global practices of manufacturing and skilling systems, to promote awareness on medical devices safety through outreach with the public, and to promote more forums to bring together various stakeholders for sharing knowledge and building strong networks across the sector.

Even though the Policy does not elaborate on the precise measures which may be undertaken to expand stakeholder awareness and engagement, the Approach Paper once again provides some indication in this regard. The Approach Paper envisages measures including, inter alia, webinars/ workshops/ conferences to understand successful medical device investments in other countries; annual national events promoting medical devices in India; promotional events abroad, to publicise the Indian medical device sector on a global scale; and awareness sessions to inform the general public of safety and standards of medical devices.

Conclusion

The Policy will be implemented alongside the “Production Linked Incentive Scheme for Promoting Domestic Manufacturing of Medical Devices” (“PLI Scheme”), which was approved on March 20, 2020 by the Government of India.[9] Under the PLI Scheme, financial incentives are provided to selected companies for the goods manufactured in India and covered under specific target segments. Similarly, the Government of India approved the “Scheme for Promotion of Medical Device Parks” on March 20, 2020[10] with the aim to provide common testing and laboratory facilities at one place. It helped reduce manufacturing costs and enabled creation of a robust ecosystem for medical device manufacturing in India. The Policy seeks to complement these initiatives by blending with the government’s larger objective of building a robust regulatory, economic and legal landscape for medical device manufacturing in India. At the same time, the Policy endeavours to balance the needs of the industry with the interests of consumers by adopting a patient-centric approach. Accordingly, the Policy aims to enhance affordability and accessibility of medical devices to widen the use across hospitals in India and to provide better quality, affordable healthcare.

The Policy is expected to strengthen the domestic medical devices industry, equipping it to address the global healthcare needs while at the same time addressing the healthcare needs of patients in India. It seeks to make the domestic medical device sector more competitive, self-reliant and innovative while maintaining the highest standards of quality, safety and efficacy. However, challenges exist on both the economic and regulatory fronts, and the success of the Policy can only be determined basis its implementation and efficacy. To this effect, the Policy admirably provides a monitoring mechanism, wherein quantitative output/ outcome metrics will be formulated in due consultation with NITI Aayog, to measure several metrics including access, affordability, reduced disease burden, creation of jobs in R&D, safety, self-reliance etc. Further, the Policy speaks of regular monitoring of economic indicators like market size, exports, and foreign direct investments.

The Indian medical devices industry is already manufacturing a wide variety of devices and equipment; however, India has not yet been able to foray into the market for high end and high value devices. X-ray, CT and MRI machines, for instance, continue to be imported into India rather than being domestically manufactured. The Policy aims to plug this gap and also to service the global markets. As stated above, the success of these planned measures is entirely dependent on their quick and effective implementation and enforcement, and it remains to be seen how this will unfold. Many of the envisaged programs would require close inter-State as well as Centre-State cooperation. Constant interaction with the domestic as well as international players (who may also be looking to expand R&D/ manufacturing operations in India), and taking their inputs at every stage would also be a key requirement. If the Policy is not implemented in a time-bound manner, India may lose out on the opportunity, created by recent global developments, to position itself as a medical device manufacturing and R&D hub.

A step in the right direction. As for its success, only time will tell.