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Building
Manufacturing Capabilities for Medical Devices in a
Developing Country – India, a case study
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Dr. Jitendera Sharma
Mg. Director, AMTZ |
Mr. Rajiv Nath
Forum Coordinator, AiMeD |
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1. Preamble and Background :
1.1 Government of most developing
countries has laid emphasis on provision of good quality,
affordable and comprehensive healthcare to all its
citizens. While Healthcare infrastructure & Human
Resources are areas in which most countries have achieved
self-sufficiency, Medical Devices has usually remained a
laggard sector where focused action is very much required.
1.2 Medical Device Industry (MDI) is a
multi-product diversified engineering industry from simple
tongue depressors & glucometer strips to large radiology &
electronic modules. Global market for medical devices is
over US$ 220 billion in India it is relatively small
compared to rest of the manufacturing sector; guesstimates
would place the Retail Sales at over US $ 10 billion
estimate, growing steadily at a rate of 17% CGAR. Within
MDI, the broad product classifications that exist are:
I) Disposables & Consumables;
ii) Surgical Instruments & Implants;
iii) Equipment & Electronics & iv)
Diagnostic Reagents. Domestic manufacturing is
concentrated around low cost devices such as Intra-ocular
lenses, catheters and syringes; as well as production of
implants. Some growth spikes have also been achieved in
manufacturing of radiology and ultrasound products, cath
labs and linear accelerator.
1.3 It is estimated that there are about
800 manufactures in the country with average turnover of
US$ 7 million & average export turnover of $ 2.5 million
1.4 While MDI in India faces a classical
set of challenges, primary among them being lack of
motivation to manufacture many medical devices with
unviable margins due to ease of low cost imports
(including pre-owned equipment) coupled with absence of
robust regulatory framework for medical devices, avenues
for pooling and bridging of adequate fresh talent into the
sector, lack of pathways for uptake of innovations in
supply chain; lack of subsidies and incentives appropriate
to the levels of providing a bolus to the industry, Steps
have been taken on some of these, such as - Medical
Devices Rules 2017; classification of occupational
standards under Health Sector Skill Council; Competency
mapping of biomedical engineers under IBSC (Indian
Biomedical Skill Consortium) incentives for export
promotion by Department of Commerce; Preferential
Procurement Order guidelines for procurement by public
healthcare under GOI , initiation of AMTZ medical devices
park in Andhra Pradesh and another one by Telangana;
establishment of Kalam Institute of Healthcare Technology
to accelerate indigenously developed technologies and
Government’s decision to have more IITs for speeding
research. Some of the areas however are still unattended
to, and require more concentrated and comprehensive
approach. While many of these steps have been
comprehensive efforts from Ministry of Health & Family
Welfare; Ministry of Commerce & Industry; Dept. of
Pharmaceuticals, Niti Aayog and Ministry of Electronics a
need for central information pooling and coordination
mechanism has been felt by the Government.
1.5 A GOI (Govt. of India) constituted
Task Force in its report on 8th of April 2015 elucidated a
set of recommendations for boosting growth of MDI in
India.
2. Salient Features & recommendation :
(I) Coordinating & Facilitating Agency:
The policy envisages setting up of an autonomous
facilitation body “National Medical Device Promotion
Council) to be created under the Department of
Pharmaceuticals to provide necessary facilitation and
coordination, to various departments and ministries.
Additionally, Industry recommended that the Department of
Pharmaceuticals needs to be renamed as Department of
Pharmaceuticals & Medical Devices and in future could be
housed in a Ministry of Healthcare Products. The NMDPC
would need to be staffed with a mix of personnel from Bio
Medical engineering, Product Development, Medical and
Marketing backgrounds with needed expertise for enabling
interdepartmental coordination.
(ii) Infrastructure creation: The policy
recommends setting up of Medical Technology Industrial
Parks and medical devices testing laboratories under PPP
mode as revenue generating self-sustaining business models
while providing for low cost/subsidized testing facility
for the industry and setting up of Common Incubation
Centers (CICs) with appropriate incentive structure and
cost sharing mechanisms and establishing technical and
financial frameworks for their function. The industry
recommends development of common technology clusters,
sharing common manufacturing facilities, ancillaries,
common testing facilities and a CAPEX sharing model with a
revenue supporting stream.
(iii) Intellectual Property & Skill
building: the policy envisages:
a. With support of Indian Patent Office,
for transfer/operationalization of Intellectual Property
for facilitating voluntary technology uptake and
upgradations, through established commercial models.
b. Enabling protective measures to protect
outright purchase of patents from research institutions
and startups based within India.
c. For assisting product development and
to aid demonstration of Regulatory compliances, there is a
need for capability development in testing of medical
devices. The existing laboratories need to be up gradated
and accredited and provide access to low cost access to
testing and impediments for doing research on IVD and with
tested blood samples need to be addressed. Laboratories in
certain Universities with bio technology courses can be
encouraged to provide antigens and antibodies and sero
conversion panels to IVD industry which currently depends
totally on imports.
d. Working with stakeholders such as
National Skill Development Agency (NSDA) for promotion of
occupational and vocational standards for training of
engineering workforce for medical devices industry.
3. Policy support sought by industry :
a. Government being the biggest buyer can
accelerate domestic manufacturing with a Preferential
Purchase Policy with Preferential Pricing (as per World
Bank Terms) for Indian Medical Devices for Public
Healthcare Tenders and consider the need to encourage
quality and safety provide weight age for ICMED (Indian QA
Certification for medical devices) and ISO 13485 QMS
Certification and similarly for Design India Certification
for promoting indigenous development. The Public
healthcare system needs to move from Lowest Price basis to
UN system of Sustainable supply chain basis and penalize
suppliers with a poor track record of service and delivery
and reward those with proven services as well provide
opportunity to new entrants and startups.
b. Promoting activities supporting
technology transfers increase in market access and those
supporting commercialization of innovations;
c. Studying international best practices
and recommending evidence based industry promotion
strategies including manufacturing incentives such as
interest subsidies, concessional power tariffs, provision
of seed capital and/or viability gap funding;
d. Providing tax liberalization measures
including but not limited to – higher weighted tax
deduction on approved expenditure on R & D to cater to
high gestation period; extension of R&D tax benefits to
Limited Liability Partnerships; tax and regulatory
barriers on import of preowned medical devices, wherever
found necessary / applicable; incentivizing export of
medical devices; and formulating guidelines for mergers
and acquisition in medical device sector to protect the
interest of medical devices industry.
e. A planned predictable tariff policy to
enable business viability and to make investment in this
sector attractive and provide nominal protection in a
phased manner. Basic Import Tariff needs to be increased
from 0-7.5% to 15% for Medical Devices and duty on
components to be 7.5% as a Make in India enabler.
Concessional duty on medical grade Raw Materials may be
retained at 2.5% for now, for next few Years.
f. Supportive Clinical environment: Policy
to encourage government hospitals & medical colleges that
would partner with domestic manufacturers in clinical
evaluation as per regulatory requirements and HTA (Health
technology assessment) studies with reasonable charges and
publication of studies of clinical outcomes.
4. Regulations to ensure Patient Safety
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A Policy to ensure patient safety and
build competence and competitiveness is needed whereby
Government should incentivize voluntary Indian
Certification for Medical Devices by QCI (Quality Council
of India) and expedite legislation for Regulation of all
Medical Devices outside the ambit of the Drugs & Cosmetics
Act at one go with a defined transition period for
enabling capacity building for the manufacturers and
Regulatory Framework.
Conclusion: A National Medical
Device Policy framework needs to achieve time bound growth
of medical devices industry by supporting measures to
promote manufacturing as part of Make in India and
enabling improved affordable access to medical devices for
general public with the objective of inclusive Growth..
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