India Scraps Proposed Law Affecting Medical Devices

By Gunjan Bagla, Amritt Inc.

Some interesting medical device news came out of the world’s fastest growing major economy, India, last week.

The office of Indian Prime Minister Narendra Modi announced that it will scrap a proposed law that would have amended parts of India’s Drugs and Cosmetic Act of 1940, which establishes the nation’s regulatory framework for medical devices, pharmaceuticals, and clinical trials. After allowing the bill to linger in parliament since 2013, and in various committees for years prior, regulators have decided to pursue a new law rather than amend the old.

Such news is normally published by the Ministry of Health, not the country’s chief executive, so medical device companies should take careful note. The implications are important for manufacturers doing business in India.

The Drugs and Cosmetic Act of 1940 was adopted seven years before India’s existence as an independent nation — and nine years prior to the founding of today’s largest pure-play medical device company, Medtronic. The law was originally written for pharmaceutical products, and medical device regulation has been bolted on.

In explaining why the proposed 2013 Drugs and Cosmetics bill is being withdrawn, Dr. Gynanendra Nath Singh, head of the Central Drug Standard Control Organization, said that, “we thought it was better to revise the law than to put more bandages on it.” The prime minister’s office justified the move by saying that “newer areas of biological, stem cells and regenerative medicines, medical devices and clinical trial/investigation, etc. cannot be effectively regulated under the existing law.”

If you look beyond the bureaucratic language and the political underpinning of the announcement, there are four key motivations for writing a new law:

• Prime Minister Modi is personally committed to making India an easier place to do business.When he took over, India was ranked below #100 on the World Bank’s “East of Doing Business Report.” Modi’s government wants to raise the ranking to among the top 50.
• Modi’s “Make In India” campaign sees medical devices, biologics, regenerative medicine, and advanced pharma as avenues where India can be a more credible destination for global investment in manufacturing.India already is the largest global player in generic pharma.
• The government has liberalized criteria for foreign direct investment in many sectors. It is possible that updated regulations for devices, along with sustained growth in India’s $2 trillion economy, will make the country a more attractive destination to produce products whose intellectual property content discourages western companies from manufacturing in China.
• There is a practical recognition that devices need separate regulation from drugs.

India's Ministry of Health & Family Welfare has already prepared separate rules for medical devices under the existing act, and has begun drafting separate laws for regulating medical devices and drugs and cosmetics. The ministry has been in contact with American and European regulators to seek suggestions on the regulations, and a draft of the new legislation is expected during the fourth calendar quarter of 2016, if all goes well.

Reports in Indian media said that industry welcomed the move. According to LiveMint, AdvaMed India stated, “We appreciate the government of India’s efforts over the years to press forward with legislation that would create separate and appropriate regulations for medical devices. We view the withdrawal of the Drugs and Cosmetics (Amendment) Bill, 2013 as an opportunity to start fresh and consult with relevant stakeholders to draft new and globally harmonized legislation that would once and for all carve out distinct regulations for medical devices.”

What To Expect In The Future

Once the draft law is published, there may be a period of discussion and debate among various stakeholders, although this is not required by Indian practice or procedure. The new law (or laws) must then be presented as bills, and passed by both the Lok Sabha and Rajya Sabha, India’s two houses of parliament.

Following passage of the bills  (and publishing in The Gazette of India, a public journal issued by the Indian government),  officials inside the Ministry of Health will need to create the day-to-day regulations, procedures, and forms that will govern how companies register and sell their device and pharma products within India.

This entire process is likely to take several quarters, assuming that India’s parliament takes up the bills in a timely manner and passes them without much controversy.

About The Author

Based in Los Angeles, Gunjan Bagla is managing director of Amritt Inc., a California-based consulting firm focused on helping American companies to succeed in India. His clients include Covidien, Roche Diagnostics, BD, Nordic Naturals, Johnson & Johnson, Gojo, and many more. Gunjan spoke three times at the MD&M West Conference in Anaheim, and was on the keynote panels at MEDevice San Diego and IMDI in Ahmedabad, India.

For his India expertise, he has appeared in The New York Times, the Los Angeles Times, and the Washington Post, and on Bloomberg TV, BBC Television, and Fox Business News. He also writes about India for the Harvard Business Review and the Huffington Post. Gunjan has an MBA from Southern Illinois University and a mechanical engineering degree from the Indian Institute of Technology (IIT) Kanpur in India.