Implications Of Medical Device Regulations

In the wake of new medical device regulations issued by the DCGI, Neesha Patel uncovers the current regulatory scenario and what lies ahead for patients seeking medical treatment in India

With innovation and the rapid advancement of technologies, medical devices are currently one of the fastest growing industries, and the global market figure for 2006 is expected to exceed USD 260 billion. Yet, many developing countries lack access to high quality devices and equipment that meet their specific epidemiological needs. Consequently, a vast majority of devices are imported, rendering them open to unscrupulous market influences, which potentially put patient’s lives at risk. Examples of such issues include the illegal reprocessing and repackaging of used syringes for resale, market availability of equipment that fails minimum quality and safety standards and the lack of vendor and product knowledge in the country.

This is particularly true for countries where health technology assessments are rare and where little regulatory controls exist to prevent the importation or use of substandard devices. In 2004, the 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 in India. These regulations work within a similar framework as medical ‘drugs’ and aim to enhance the requirements for devices that were subject to few or no controls, reduce duplication of devices previously assessed by foreign regulatory bodies and place increased emphasis on manufacturer quality, risk management systems and post-market surveillance.

"The Indian market is characterised by extremes - at one end we have truly world-class certified products and on the other we have unsafe uncertified devices; both should be regulated in an appropriate way to ensure patient safety" - Pavan Gurha Member ASSOCHAM Expert Committee on Health

With the rapid growth in the Indian medical device market, there is an urgent need to harmonise national guidelines in order to minimise regulatory barriers, facilitate trade and improve access to new technologies, as the proliferation multiple regulation models increase healthcare costs and can unwittingly jeopardise patient safety. The Government requires policies that address a broad spectrum, ranging from access to high quality, affordable products to safe and appropriate use and disposal of devices. According to Pavan Gurha, Head, Department of Anaesthesiology & Critical Care, Batra Hospital and Member, ASSOCHAM Expert Committee on Health, “The Indian market is characterised by extremes - at one end we have truly world-class certified products and on the other we have unsafe uncertified devices; both should be regulated in an appropriate way to ensure patient safety.”

Close Look At Regulation Specifics

The regulation of medical devices is a vast and rapidly evolving field that is often complicated by legal technicalities. The Drug Controller General of India (DCGI) formulated guidelines for the import and manufacture of medical devices to be effective from June 26, 2006. As per the guidelines, 10 categories of sterile devices declared as medical ‘drugs’ under the Drugs and Cosmetics Act would be imported under the procedure for registration and import license prescribed by the same; a move that hoped to bring additional discipline to the sector, even though the primary mode of action of a medical device is not metabolic, immunological, or pharmacological. According to Dr Gautam Sehgal, Treasurer, Indian Healthcare Federation, “We are happy that there is a change and we congratulate the Government as there were no regulations prior to this. This classification itself is a good first step to ensure quality of devices available in the Indian market.” On the administrative front, the Government has permitted companies that have already filed approval applications, to continue to sell devices in the Indian market, till approved or rejected by the governing authority. According to Sehgal, “This is a welcomed step as imports will continue to be easily available and healthcare will not suffer.”

However, while imported devices have come under the purview of regulation, locally manufactured and non-sterile devices continue to be sold in the market. Currently, non sterile devices can be freely imported, sterilised in India at a cheaper cost and sold without any appropriate certification. If the Government wishes to ensure quality and safety, standardisation of regulatory policies is essential and can be achieved by bringing both sterile and non-sterile devices under the purview of regulation. According to Sehgal, “I believe that the Government should also regulate non-sterile implantable devices, as all goods, whether made in India or abroad, need to be of a certain standard. Certified goods are important, as India should not be used as a testing ground for devices manufactured elsewhere in the world, having no certifications or backing experience.”

The first step towards adherence of new policies is the publication and dissemination of guidance documents and public awareness programmes. Simultaneously, there should be local adoption of synchronised recommendations, a simple registration process for certified devices, proportionate registration costs and constant updation of regulations when required. Implementing a novel regulatory programme is expensive and demanding on manpower resources; USFDA/CE certification roadmaps create opportunities for countries to establish low-cost programmes that promote the safety and performance of medical devices by taking advantage of existing regulatory frameworks. According to Sehgal, “It is good that we have chosen to follow the CE certification pattern, as there is no need to reinvent a regulation process or follow extremely rigorous efforts such as the Japanese model.”

Industry experts recommend that all devices that are USFDA or CE certified should be fast-tracked and not have to go through the entire regulatory process in India, as the amount of regulations and cost of healthcare in a country are directly proportionate. According to Sehgal, “Japan is the most regulated market consequently having the highest cost of healthcare. For example, a certified mechanical bi-leaflet heart valve sells in India for USD 1,000, Europe for USD 4,000, US for USD 7,000 and in Japan for USD 12,000.” Not only are high costs passed down the value chain to patients but also restrict the availability of devices, as those which do not accrue a minimum revenue to cover costs, do not make business sense to import.

Additionally, there is distinct disparity in regulation awareness, based on inadequate publicity in both rural and urban areas and the negligible impact on availability of devices in large cities. In the rural areas, majority of health work is primary in nature so the need for high-end medical equipment doesn’t arise. According to Pavan Choudary, MD, Vygon India and Chairman of the European Business Healthcare Group, “These are statutory regulations that have been put at customs ports as well as the factory, addressing imports but not device usage.” Fortunately, doctors working in large hospitals are now aware of the new regulations and to safeguard reputation and ensure quality and safety, hospitals have a prerequisite of device certification prior to purchase.

Experts caution that safety is measured in relative terms, as all devices carry a certain degree of risk and have the potential to cause harm in unforeseen circumstances, primarily because complications are not detected prior to extensive market experience. For example, an implantable device may fail in a manner that was unpredicted at the time of implantation or the failure may reflect conditions unique to certain patients. The current approach to device safety is to estimate the potential of a device becoming hazardous, and in practice, risk assessment is based on the experience of health care professionals and safety design engineering. At the same time, Governments should be ready to exercise a national recall of devices, inform the drug controlling authority and publicadequately, if devices lose their certification abroad.

Education and training of users and the continued assessment of medical devices in use, is as important as product control. The credibility of a device comes from the manufacturer and certifying authority. To ensure patient safety, it is critical to have a system that informs and collaborates with the manufacturer, vendor, patients and relevant international organizations. According to Alok Mishra, CII Chairman, Medical Equipment Division, “The ultimate aim is to make sure that patients get the appropriate result. Doctors need to be given adequate training on how to use devices and patients should demand quality assurance.” In India however, there is a distinct lack of safety awareness and no scope for DTC marketing, as patients are unaware of the implications of device choice. In most cases, the doctor-patient relationship is based on faith and patients are confident that in their best interest, the device used will be of reputed quality. If a doctor advises a patient to buy a costlier device, most patients are willing to compromise on peripherals to raise the extra money to cover device costs. Direct-to-doctor marketing is generally possible when there is a consumable in the device; when a component gets used and requires replacement on a regular basis; such as needles of blood glucose meters. In such cases, most interaction between companies and doctors is limited to communication regarding optimal modes of treatment. Gurha states that, “Giving the patients a choice with regards to medical devices is too time consuming and often patients are not aware of the differences, so it does not make sense.” Additionally, misleading or fraudulent advertising by smaller devices could increase individual company sales, while depriving patients of appropriate treatment.

Going Forward

Until now, patients haven’t been affected by the new regulations, as price and availability of devices has remained the same. However, experts predict that the cost of devices is expected to rise primarily because of registration costs, which include the registration fee, salary of additional staff hired to follow registration process and paperwork and increase in countervailing duties to four per cent, announced in the last budget. As with increases in duty and dollar appreciation, the financial burden will be passed down the value chain to patients, rendering devices more expensive and treatment unaffordable for those without insurance coverage.

According to Choudary, “Insured patients won’t feel the pinch as critical care devices are used while the patient is hospitalised and insurance covers hospitalisation costs. However, for uninsured patients or patients who are on the threshold of affordability, the horizon has moved further out of their grasp.”

Smaller devices constitute approximately five per cent of the total medical bill, so an eight per cent increase is marginal and barely noticeable. For larger devices such as stents, that constitute 70 per cent of the total medical bill, any increase in cost will definitely make treatment significantly more expensive. According to Gurha, “Patients who can afford allopathic or surgical treatment, can also afford a couple percentage increase in cost, so in the long term, the number of procedures will not decrease.” Currently, some institutions offer package deals, which absorb the cost of the device so there is no out-of-pocket device spending. However, India is a price sensitive market and less than five per cent of patients are covered by medical insurance, rendering package deals unaffordable to approximately 60 per cent of patients. For financially weaker patients, medical staff are forced to substitute sophisticated devices with alternate or less expensive ones, so that the patient is not burdened by an insurmountable debt. Gurha states that, “If devices become too expensive due to registration and other arbitrary charges, financially handicapped patients will definitely resort to cheaper unapproved devices that are ultimately a threat to safety and efficacy.”

Additionally, when the regulations first came into effect, experts felt that the medical tourism industry would suffer partial setbacks, as devices are a large constituent of hospitalisation costs. Contrary to perceptions, the medical tourism industry has not been affected as majority of the hospitals catering to medical tourism are tertiary in nature and have existing pre-requisites for USFDA/ CE certification, prior to device purchase. Patients availing of medical tourism are willing to pay higher device costs to ensure safety and quality, as overall healthcare is considerably cheaper in India.

In order to minimise substandard medical devices in global trade, there is a need to adopt recommendations on global harmonisation for regulatory requirements and procedures that comply with domestic regulatory requirements. Medical device safety and performance is multi-phased and requires collaboration with all stakeholders to establish a clear and comprehensive national policy. Gurha insists that, “Even if there is an increase in costs, patients and institutions should be ready to pay it, as it concerns safety and quality. Using unapproved devices with the aim of cost saving could prove to be many times more expensive if complications arise.” Classified medical devices should be manufactured in conformity with applicable quality system standards and linked to networks that monitor and participate in post-market surveillance. Additionally, the Government should have a national database on vendors and products available in the Indian market, to permit effective quality control.

The industry congratulates the Government for its aim to regulate the device space, as it is in the best interest of patients and healthcare deliverers. At the same time, companies are pushing for a one time registration fee of USD 1,000, instead of every three years as stated by the Government. Sehgal states that “There will be no increase in costs as long as the Government sets a one-time registration fee. If companies are expected to register each product every three years (costing USD 1,000 each), the cost of medical devices and overall healthcare, will definitely increase.” Other suggestions from the industry include the coverage of both sterile as well as non sterile devices under these regulations, an open-ended registration process, fast track for all USFDA or CE approved products and a refrain from over-regulating the healthcare space. According to Anjan Bose, CEO, Philips Medical Systems and the immediate Past Chairman of CII, Medical Equipment Division, “Overall the regulations are consequence of the transition from an underdeveloped to a developed model of healthcare, one that is characterised by appropriate regulation and high quality devices, which ultimately benefit the patient. We need to manage the pain of this liberalisation and if all stakeholders responsibly handle this implementation, our healthcare industry will be greatly benefited.”

The writer is a Research Analyst based in Mumbai. E-mail: neeshap@gmail.com