Indian feds stake out plan to become a global hub of device manufacturing and innovation

Print 16 June 2015
Varun Saxena / FierceMedicalDevices

India plans a federal National Medical Device Authority to promote its nascent med tech sector through such industry-friendly measures as the creation of industrial parks, tax concessions and direct government funding of startups. But price controls and preferential treatment of manufacturing devices domestically are also part of the plan, to the concern of industry bigwigs, who are largely based in the U.S.

The country's medical device industry is reliant on imports, which account for about two-thirds of its $4 billion med tech sector, including 80% among surgical instruments/medical electronics, implants, and diagnostic reagents.

The National Medical Device Authority will be tasked with providing "a single window mechanism to the industry with an objective of promotion of the medical device industry to make the country not only self-reliant but also a global hub of production and innovation in medical devices," according to a government draft document, dubbed National Medical Device Policy-2015.

The document lists a plethora of steps to be taken, such as the creation of a skill development committee to strengthen the country's med tech workforce.

Reuters reports that local manufacturers (who are mostly confined to manufacturing disposable and consumable equipment) want more provisions to discourage imports. The plan already calls for preferential government procurement of devices manufactured in India--especially from smaller (largely domestic) enterprises, and tax benefits for domestic devices, as well as higher taxes on users of imported secondhand devices.

Other possible concerns of major players include the document's declaration that the government may regulate the prices of medical devices by issuing a Medical Devices Prices Control Order.

According to Reuters, Johnson & Johnson ($JNJ) and Becton Dickinson ($BDX) already manufacture devices in India, while imaging companies Philips ($PHG), General Electric ($GE) and Siemens are expanding production there as well. For instance, GE Healthcare recently announced the launch of the indigenously designed, low-cost Revolution ACT CT scanner in India, marking a win for the country's "Make in India" campaign.

Indian Prime Minister Narendra Modi is seeking more foreign direct investment into the country. To that end, the government plans two medical device industrial parks in Gujarat and Tamil Nadu and made it easier for foreign devicemakers to invest in the country. It's also trying to implement a medical device surveillance and adverse event reporting program to strengthen patient safety.

India's lack of medical device regulation has made it easy for foreign players to introduce new medical devices into the country--as well as its large private hospital sector, which is willing and able to buy advanced equipment, in contrast to the underdeveloped rural healthcare system for the masses that's largely run by the state.

Stakeholders have 6 weeks to comment on the draft proposal. Then the Department of Pharmaceuticals will secure funding to implement the plan. It will also write a separate proposal to establish the new price controls.

A plan to start regulating medical devices separately from drugs is currently making its way through the legislative process and could have a greater impact than the plans for a National Medical Device Authority, which are being conducted at the cabinet level (akin to an executive order).

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