ACTION POINTS For Establishing Medical Device Manufacturing Industry by PMO o Legislative o Policy & Rules o Administrative & Coordination A. MOC – Ministry of Commerce 1. Review Norms of FDI Policy. Restrict Shareholding of MNC’s (i) FDI permitted for putting MFG units not for trading/warehousing. (ii) MNC 100% owned subsidiary should be permitted to trade if Mfg .Revenue not less than 60% (iii) Restrict Max Shareholding to 40% if Indian subsidiary trading revenue will be over 40% (iv) Minimal 20% Shareholding for Indian Public/F.I’s . (v) Do not consider 100% Auto Approval Routes for 100% FDI in Brown Field Take Over Projects. 2. Infrastructure (i) Focus on improving Existing Clusters – Delhi NCR, Ahmadabad, Chennai (ii) SEZ – Medical Technology Parks etc. 3. Export acceleration strategies. (i) Easy availability of Free Sales Certificate, not only from DGFT - DCGI, EXISTING UNITS ON BASIS OF CE / Endorsement of DGFT Certificate (ii) MDA & MAI – 15 Cr Cap to be waived (iii) MEDICA, ARABHEALTH, Africa Health - trade fairs subsidized participation (iv) Africa centric – PEPFAR US AID – Replication INDIA AID (v) China – 17% subsidy on medical devices exports Vs. INDIA 2-3% reduced from 4-5% (vi) MADE IN INDIA – INDIAN registered BRANDS 3% Additional FMS/DEPB (vii) 25 % subsidy on Foreign trademark Registration fees and 50% for Product (viii)Status Holder Privilege – Green Card for NOC Waiver (ix) Accelerated Depreciation at double rate for income tax for ISO 13485 certified co. (ix) Modernization fund – minimal interest loan to upgrade plant facilities – 5 years B. MOF – Ministry of Finance Ministry of Finance Correct/Rationalize Inverted Duty structure  Fiscal, Correct Inverted Duty Structure  Anomalies in Tariff to be corrected of 90.18, 90.21, 90.22, 90.27, 30.06 & 48.18: - Reverting SAD from 0% back to 4% - Increase Basic Duty on Devices to Min.10% - Reduce Basic duty on Consumables to be 7.5% - Maintain Basic Duty on Parts of Devices 5 % - Keep Max. Basic Duty on Raw Material & Packing Material 2.5%  Remove disparity of High Seas Sales circumvention of VAT/Import duty  Address dual interpretation and recovery of additional Excise Duty on Reseller /Associate Co. invoice of JV Co.s C. MOH – Ministry of Health (i) Creation of Dept. of Medical Devices as Coordinator ( NHSRC ?) (ii) Buy Indian Public Healthcare Policy - 15% benefit for Indigenous products as for World Bank Tenders to neutralize Chinese 17% subsidy on exports. - All public health tenders mandatory IS: 15579/ISO:13485 certification (iii) Regulation of all Medical Devices but not as Drugs (Incomplete & Incorrect regulatory framework is confusing investors) Overdue Short Term actions by CDSCO / MOH:  Finalization & Issuance of Guidelines for - Initial Factory Audit of QMS & Infrastructure. - Export Labeling & Procedures / No NOC. - Application of Additional Brand - Application for Neutral Code No. - Application of Free Sales Certificate - Import of Non sterile Assembled Devices - Clinical Evaluation ( Not as Clinical Trial for New Drugs) - Adverse Event Reporting  Amendment of D & C Rule 76 & Schedule MIII - GMP compliance as per IS:13485 - Risk Proportionate Infrastructure Requirements - Revision of Batch Release Criteria on basis of Biological Indicator & Process Validation. Overdue Long Term Measure: Appropriate (non Drug) Regulatory Framework  Remove Medical Devices from Definition of Drugs through an Ordinance  Introduce Bill for Patient Safety & regulating Medical Devices through a NRA under MOH  Rename CDSCO as IHPRA - Indian Healthcare Products Regulatory Authority – Drugs, Cosmetics, Medical Devices & Diagnostics  Regulatory controls to be split , shared and delegated between Centre, State , CAB’s - E.g. Centre for Policy, Licensing, Registration for Mfrs / Exporters/Importers  Factory Audits QMS delegated to expert competent NABCB accredited CAB’s  State Authorities to Regulate Logistics & Sales  Involvement of ALL Stakeholders in Regulatory Review  Evaluation of Risk & Hazard by CAB for suitable corrective & preventive action (CAPA)  Reasonable time for addressing issues and implementing CAPA  Move for an Autonomous NRA – IHPRA (?)  NRA to have powers for speedy administrative action & for putting things RIGHT  Minimal/No reliance of judiciary and legal criminal action on registered units  Reliance of Judiciary/ Police and criminal action only on non registered units.  Regulatory Controls to be Risk Proportionate & 4 Tiered.  Medical Devices to meet defined Essential Requirements of Safety  GMP compliance to IS :13485 QMS for medium to High Risk devices & ISO 9001 for low risk  IHPRA & NABCB to supervise & accredit competent CAB’s  Regulations to encourage – MAKE in INDIA & Made in INDIA  Primary Manufacturers, Packers, Relabellers to be regulated by IHPRA.  Manufacturing to be at least assembly with substantial Domestic Value Additional.  Importers/Marketing Cos/Distributors not to be permitted to be Psuedo Manufacturers  Labeling to clearly define above and not ‘Make in India’ labeled as ‘Made in India’.. D. DOP – Dept. of Pharmaceuticals (Ministry of Chemicals & Fertilizers)  Dept. of Medical Device / Dept. of Pharmaceutical & Medical Devices  Vision To create India as one of Top 5 Manufacturing Hubs for Medical Devices Worldwide and be Nodal interface of Manufacturing Industry with all Central Govt. Dept’s.  Objectives / Functional Role a) Coordinate with Key Stakeholder Ministry of - Finance, for creating a Rational Growth Inducing Tariff Environment - Health, for Buy Indian Policy & Appropriate World Class Regulatory Framework - Commerce for Developing Exports, Addressing Non Tariff Barrier of Importing Countries, Create Brand India & Restrict FDI to Manufacturing - Industry, for Ensuring Indian Investor & Business Friendly Policy Regime - Consumer Affairs, for Ensuring Consumer Protection & Affordable Devices with Fair Pricing - Science & Technology, for Self Reliant Product Development & Indigenisation - MSME, for Developing Capacity of Medical Device Enterprises at Micro, Small & Medium Level to go up the value chain - Ministry of HRD, for Knowledge & Skill Development - Prime Minister’s Office, for Ensuring Support of Speedy Policy & Legislative Changes b) Catalyze Growth of the Indian Medical Device Sector – Make in India, Made by India, Made for India – structured Policy to be issued c) Define Priority Devices to fight Priority Diseases with assistance of WHO & MOH d) Implement Strategy to Shift India’s Import Depedency from Over 70% to Less than 30% in Next 5 Years for Priority Devices and Next 10 Years for all Devices e) Create a Forum for Close Working between User, Developers, Academia, Manufacturers & Govt. f) Create and Manage a Special Purpose Vehicle Fund for Govt. to Jointly Own Patents / IP’s Shareholding and infuse 100 Million $ or 5000 Crore Rs. as Equity for Long gestation R&D Projects under Made by India & Make for India Projects for Enterprises with NIL Foreign Equity g) Facilitate Creation & Development of Clusters for Medical Devices h) Facilitate Creation of Laboratories & Service Centers under PPP i) Facilitate Skill Development of Personnel in Field of Manufacturing, Sales, Service & Regulations. E. MOCA - Ministry of Consumer Affair (NOT NPPA) & Ministry of Finance (Customs)  Safeguard Consumers & Need for Level Playing Field with Imports Discourage Artificial inflation and never ending inducements to Retailers/Corporate Hospital (i) Enforce Labeling of Max. Retail Price on Unit Pack on Imports not only on shelf box. (ii)Regulate max. Mark Up between Ex- Factory weighted average price and MRP. (iii)Discourage Inflationary Max retail Price revision by Tax Mechanism (iv)Plug loop hole of No MRP for Institutional Supplies.  Enforce Labeling of Country of Origin on Unit Pack  Enforce 2/3 rd shelf life at time of imports F. MOST & MOIT – Ministry of Science & Technology – Ministry of Information Technology  Infrastructure / Support system for R&D & Indigenous Development Goals : • Blue Sky innovation • Incremental Innovation • Increase Device/procedure efficacy • Reduce Device/procedure cost Address Disincentives ◦ Tenders stating “Imported / US FDA Approved Only” ◦ Absence of Regulatory Framework Incentives  Funds/ Grants/Soft Loans for R&D (not only commercialization).  Patent filing support and cost reimbursement even for privately funded research  Subsidized access to Testing Labs/IP/Market Data/Standards (to be set up with PPP)  Talent hunt / Innovation development contests - incentives to promote Top 3 ideas adoptable by industry.  Inculcation of “unmet need identification” strategy even at primary healthcare levels. Infrastructure: CLUSTERS IS THE KEY TO SUCCESS  Dedicated Med Dev Incubators with appropriate Infrastructure for: ◦ Prototyping ◦ Testing ◦ Evaluation ◦ Mentorship into commercialization ◦ Interaction with Hospitals and Industry. Information  Online database for providing commercial access to the innovations  Online library to access to latest market information  Online access to BIS standards  Auto - Adoption of ISO standards by BIS  Exhibitions/Conferences/Forums created by GOI to bring Medics, Scientists, Developers Manufactures together Mentorship  Free access to inventors to mentorship programmes.  Increased interaction between academia and industry Capability Development  Up gradation of test Labs  Access to low cost testing  Accreditation of Labs  Training on Regulatory Requirements - Short Term Courses @ NIPMER - Distance e – Learning  VC Fund for patentable products  Tax benefits to Incubator Co. Acceleration for R&D, Defining Priorities: Ministry of Health & WHO to map priority disease & Target List of priority Devices  Commercialization not Academic Acclaim  Forum/ Mechanism for close working between USERS, Developers & Manufacturers  Expediting Patent Application processing  Bringing in Utility model  Improved Access to Funding in transparent manner from DST,DBT,ICMR BIRAC etc.  Remove Impediments by NABL for research on IVD and giving tested blood samples  Create special purpose vehicles like China for Govt to jointly own patents/IP s shareholdings and infuse 50-100 million$ as equity for R & D projects.  Govt. Colleges and Hospital to allow trial purchases. ______________________________ x ________________________________
Copyrights 2009. Association of Indian Medical Device Industry.