Regulation Of Medical Devices: A Changing Landscape

New medical device guidelines came into effect on March 1, 2006. But, high registration fees and arbitrary demands for information are potential barriers to innovation and import of life-saving devices, finds out Neesha Patel

In 2004, Dr Narendra Bansal's use of unapproved and untested stents, marketed by a Netherland-based company Occam, on 60 patients at JJ Hospital provoked an intense inquiry into the nature of devices used on patients and the nominal jurisdiction of the medical device industry in India. Alarmed by the large-scale use of illegal and unapproved medical devices in the country, the Department of Medical Education and Research (DMER) banned use of unapproved stents and stated that all medical devices required approval in the country of manufacture or US Food and Drug Administration (FDA)/CE certification. In 2004, Mashelkar Committee called for the creation of a specific medical devices division within the Central Drugs Standard Control Organisation (CDSCO) to address the management, approval, certification and quality assurance of all medical devices. This involved changing the status of sterile medical devices intended for internal or external use to medical drugs and consequently making suitable provisions and amendments in the Drugs and Cosmetics Act, 1940. This was approved by the Drugs and Consultative Committee (DCC) in July 2005 and henceforth, all devices were licensed for manufacture, distributed and sold by the CDSCO with special evaluation committees constituted to ensure manufacturing units were GMP?? compliant.

In a gazette notification, the Ministry of Health and Family Welfare (MOHFW) stated that 10 devices; namely cardiac and drug eluting stents, catheters, bone cement, heart valves, scalp vein sets, orthopedic implants, internal prosthetic replacements, IV cannulae and intraocular lenses; would be considered as drugs and consequently regulated.

Current Regulation & Its Implications

The Drug Controller General of India (DCGI) formulated guidelines for the import and manufacture of medical devices in the country to be effective from March 1, 2006; a date that was later changed to June 29, 2006. Says Pavan Choudhary, MD, Vygon India and Chairman of the European Business Healthcare Group, "The change of deadline will definitely make a difference, as new guidelines are expected shortly. This will give companies adequate time to prepare and file the papers for registration well before the next deadline."

As Per The Guidelines

• Ten categories of sterile devices declared as drugs under the Drugs and Cosmetics Act will be imported to India under the procedure for registration and import license as prescribed by the same. The DCGI has set up separate committees for evaluation and formulation of standards for conformation, for specific categories of devices.
• An importer will be permitted to submit the US FDA clearance, the European Union medical device directive and similar approvals from other countries for proof of quality. For granting of licences to locally manufactured devices with no benchmark certification, the DCGI will set up expert committees for evaluation.
• The State Licensing Authority (SLA) and the Central License Approving Authority will verify the recommendation of the committees. DCGI has also specified that all importers, stockists and retailers of medical devices will have to obtain sale licences from the SLAs within a period of three months.
• Devices that are not imported into the country by the date of notification are not permitted without the approval of competent authority. In the case of stents (specifically drug eluting stents) imports are permitted only if the applicant has sold more than 1,000 stents of the particular specification prior to the date of issue of these guidelines.

Such stipulations consequently restrict the entry of new players into the sector and have caused severe speculation in the industry. Experts predict that these guidelines will adversely hit patients, as medical device players might have to stop importing devices into the country to comply with the legal situation that demands the registration of each medical device within 60 days since March 1, 2006. Since 80-90 per cent of all medical devices are imported, non-import may lead to scarcity of crucial life-saving devices. According to Philips Medical Systems CEO and Immediate Past Chairman of CII, Medical Equipment Division, Anjan Bose, "It is a catch 22 from a patient's perspective - we need to give patients high quality and regulated devices. However, in the effort to attain this goal, patients should not be denied the availability of life- saving devices."

An issue predominantly associated with smaller medical device companies is the lack of awareness regarding medical device regulations and the extended deadline. According to Alok Mishra, CII Chairman, Medical Equipment Division, "There are still a lot of problems as many device companies are simply not aware of the deadline. Regulations with such vast implications should be widely communicated."

Companies also pointed out that the registration costs of USD 1,000 per medical device is too high, as the number of medical devices far exceeds the number of drugs; larger companies have as many as 10,000-15,000 different medical devices. In addition, certain devices, despite being crucial, do not accrue business amounting to USD 1,000. "Even though we would not want a patient to be denied of our catheters; some of which have no substitute; it will not make commercial sense for us to continue to import these, given the high registration fee," says Choudhary.

Excess documentation adds to the task, as companies need to recruit additional administrative staff and industry specialists to cover all areas that require submission for each device. These are namely, device master file, quality assurance procedures, risk assessment, biocompatibility and toxicology data, manufacturing process, details of standards to which the device conform etc. The requirement for imported devices to conform to local labelling requirements creates a logistical bottleneck for supplies while increasing the cost of surgical products.

To compound the problem, the state authorities will not be able to process the amount of data submitted due to staff scarcity, consequently leading to delays in granting of licenses. Echoing similar concerns on infrastructure bottlenecks, Bose states, "We are extremely concerned as an industry. There is a very voluminous amount of work that needs to be done in the coming months."

Such guidelines along with tax increase have hit the industry hard and may result in a 5-10 per cent increase in cost for most players. From a patient's perspective, treatment costs are expected to rise as healthcare deliverers seek to cover additional costs. From a company perspective, margins are expected to shrink, as device companies have to accommodate the four per cent increase in custom duties, announced in the recent budget. According to Bose, "A 5-10 per cent increase in costs would definitely hit companies' top and bottom lines and also result in resource reallocation."

Some experts claim that India could lose some cost advantage as a healthcare destination, as medical devices constitute a major portion of total hospitalisation costs. However, Mishra states that, "A 5-10 per cent cost increase will not affect medical tourism much, as treatment itself is two to three times cheaper in India. In fact, it will be beneficial, as foreign patients will be able to avail of locally manufactured devices that are certified, expanding the domestic market significantly."

In order to address these concerns, the CII has urged the Centre to amend the proposed medical device regulations. According to Choudhary, "We have brought these problems to the government's attention and the government has assured us it is looking into all these areas and we feel it will help us circumventing these hurdles."

One of the most pressing suggestions has been to permit the import of devices that are US FDA/CE certified, so that efforts can be focused on local manufacturers without licenses. According to Mishra, "US FDA and CE certifications are extremely robust and universally acclaimed. Efforts should be focussed on devices that have not gone through any quality control; those that are directly connected to patients' safety." Currently, the American Chamber of Commerce, Europe's UCOMED, the CII and National Committee for Medical Equipment are in talks with the MOHFW to provide a list of medical devices that require central clearance prior to import, manufacture and marketing in the country. These dialogues also hope to ensure framing of guidelines for medical devices accreditation, in addition to establishment of required infrastructure to undertake product testing in India, certification and quality standard evaluation.

On the whole, industry officials have made it clear that they are not opposing the regulations, recognising the importance of patient safety. What remains a matter of concern are the issues related to this regulation, as a few clauses could affect a $1.5 billion market, consequently taking its toll on patients. In the interest of companies that are not aware of the new guidelines put forth by the DCGI, the media should publicise the CDSCO website, where they are posted. Says Mishra, "Regulations should not kill the indigenous industry, when it is picking up in India. We have to remember that it is this industry that will bring the costs down in the future." Quality control should always be a priority and the government has industry's support in this respect. Says Bose, "I must applaud the government for its efforts and good intention towards patients. I am proud to be an Indian and fully support the initiative to ensure quality and regulation of life saving devices in India."

The writer is Mumbai-based research analyst.
Email: neeshap@gmail.com