In our previous discussion, we discussed the growing attractiveness of emerging economies for the medical device industry, with a special focus on India. Despite the exponential growth that the Indian market is experiencing, it also represents many regulatory hurdles for medtech companies. In order to resolve these issues, the Indian government is now taking steps to streamline reforms and legislation for medical devices. At the same time, the government has developed the Make in India campaign. The clear objective of these two reforms is to “substantially enhance product quality and efficiency” and greatly improve the “ease of doing business in India”.
The new amendment in medical device regulations will help streamline the Indian medical device industry. With clear cut processes and regulations, multinational companies (MNCs) will now be better incentivized to invest in India and establish more R&D hubs.
As part of this new proposed legislation, medical devices will now be recognized as a separate industry, which until now, were placed in the category of Drug and Cosmetics and got regulated through the Drug and Cosmetics Act, 2013. However, the Drug and Cosmetics Act was inadequate for medical devices and lacked complete details. The government has now recognized this shortfall, and it is proposing to withdraw the Drug and Cosmetics Act for medical devices and drugs. With special recognition of the medical devices sector as an industry, medtech companies will now get better access to real estate opportunities like Special Economic Zones (SEZ), tax benefits, and financial support from the government. With the availability of such benefits, it will be easier for foreign companies to invest in India. Additionally, this law will also help support innovation among domestic companies through financial support.
Secondly, with the new proposed law, there will be better clarification on licensing of medical devices in India. So far, there are 22 types of medical devices that require regulatory approval. However, now, the government has proposed to create A to D classes of devices. Class A devices will include the lowest-risk devices, like noninvasive medical devices and reusable surgical equipment, whereas class D devices will include high-risk devices like long-term implants. As per the new proposed law, all high-risk devices will now require a regulatory approval from the government. The government has also set a detailed procedure for auditing companies’ production and quality management systems. Increased scrutiny and better set processes will benefit both MNCs and domestic players. With the help of set processes, MNCs can now make their class D devices available easily in India. Through increased scrutiny, there will be increased focus on product quality, especially those manufactured by local companies, thus leading to a potential for exporting these high-quality products by domestic players in the future.
As these new regulations are accepted and are enforced as law, the attractiveness of the Indian medical device market will increase. There will be increased investment in this sector by foreign MNCs due to set rules and reforms. Apart from MNCs, due to better recognition as an industry, there will also be more domestic medtech players. Increased scrutiny will help in the production of safe and efficient devices; this will boost domestic medical device manufacturers so they will be able to export more of these devices to other geographies.
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