Medical Devices: Regulation and Control

New Framework for Regulating Medical Device Prices

India represents a significant market for global medical device manufacturers, with over 70% of devices sold in the country imported from established hubs like the U.S., Germany, and China. While there is substantial growth potential driven by low per capita expenditure on medical devices, Indian manufacturers face challenges in competing with global players due to limited advanced infrastructure and technology for producing sophisticated devices such as implants, imaging systems, and robotic surgical equipment. This heavy reliance on imports impacts affordability, prompting initiatives by the National Pharmaceutical Pricing Authority (NPPA) and the Department of Pharmaceuticals to develop a transparent and fair pricing framework. However, the condition of existing devices lacks comprehensive state-level statistics, highlighting gaps in infrastructure and maintenance. The new framework aims to streamline pricing, align with international standards, and improve accessibility for both new and existing devices. This article explores the recommendations, examines the status of existing devices, and analyzes how pricing mechanisms function in this evolving landscape.

 Key Observations of 2022 Committee

Medical devices in India are primarily regulated under the Drugs and Cosmetics Act, 1940 and the Medical Devices Rules, 2017 (effective from January 1, 2018). The Central Drugs Standard Control Organization (CDSCO) is the apex regulatory body overseeing medical devices in the country. The National Pharmaceutical Pricing Authority (NPPA) regulates the prices of medical devices in India. Under the Drugs (Price Control) Order, 2013 (DPCO), the NPPA is empowered to control prices. 

The Standing Committee on Health and Family Welfare (Chair: Mr. Ram Gopal Yadav) presented its report on ‘Medical Devices: Regulation and Control’ on September 12, 2022 (2).  Key observations and recommendations of the Committee are:

 1. Regulatory Framework

Observation: The current regulatory system, governed under the Drugs and Cosmetics Act of 1940, needs to address the specific needs of the medical device sector, treating devices as drugs.

 Recommendation: Enact a standalone Medical Devices Act to regulate the sector independently to ensure comprehensive oversight and clear standards tailored to medical devices.

2.Regulatory Authority

 Observation: The Central Drugs Standard Control Organization (CDSCO) needs more expertise and infrastructure to regulate medical devices effectively.

 Recommendation: Establish a dedicated regulatory body for medical devices with technical experts and sufficient resources to oversee quality, safety, and compliance.

 3.Standardization and Quality Assurance

 Observation: Many medical devices in India fail to meet international standards, raising concerns about quality and safety.

 Recommendation: Align domestic standards with global benchmarks (e.g., ISO and WHO standards) to ensure safety and promote competitiveness in international markets.

 4. Domestic Manufacturing

 Observation: India’s medical device sector relies heavily on imports, with over 70% of devices sourced from foreign manufacturers.

 Recommendation: Strengthen domestic manufacturing through initiatives like the Production Linked Incentive (PLI) scheme, the development of medical device parks, and more significant investment in R&D.

5. Affordability and Accessibility

 Observation: High costs of medical devices due to import dependence limit accessibility, particularly for the lower-income population.

 Recommendation: Regulate pricing to make essential devices affordable while ensuring fair margins for manufacturers. Expand price caps where necessary, similar to those imposed on stents and implants.

 6. Post-Market Surveillance and Vigilance

 Discussed below

7. Capacity Building

 Observation: Lack of skilled professionals and insufficient training hampers effective regulation and manufacturing.

 Recommendation: Invest in training programs for regulatory personnel and create specialized courses to build medical device manufacturing and quality assurance expertise.

8.Public Awareness

 Observation: There needs to be more awareness among healthcare professionals and consumers about the quality and use of medical devices.

 Recommendation: Launch awareness campaigns to educate stakeholders about device standards, regulatory frameworks, and safe usage.

 9. Research and Innovation

 Observation: The medical device sector in India is underfunded and lacks significant innovation.

 Recommendation: Foster R&D through incentives, academic collaborations, and public-private partnerships to develop cutting-edge medical devices domestically.

How does the NPPA regulate medical device prices?

1. Maximum retail price (MRP)

The NPPA monitors the MRP of medical devices to ensure that manufacturers and importers do not increase prices by more than 10% in a year.

Setting Price Caps

The NPPA uses a cost-plus formula or market-based pricing to set device price ceilings.

Cost-plus Formula: This method determines the maximum retail price (MRP) based on the manufacturing cost, profit margins, and distributor margins.

Market-based Pricing: This involves calculating the price ceiling based on the average price of existing products in the market.

2. Trade margin rationalization

The NPPA can cap the trade margins of specific medical devices. For example, the NPPA capped the trade margins of specific devices at 70% at the point of sale.

3. Labeling

The DPCO requires that all medical devices are labeled with their MRP, which must include the words “Maximum Retail Price” and “inclusive of all taxes“.

• The DPCO regulates medical devices as drugs for quality control and price monitoring.
• The NPPA has regulated the prices of specific medical devices, such as pulse oximeters, blood pressure monitors, nebulizers, digital thermometers, and glucometers.
• The government is studying the pricing frameworks used in other countries to create a unique pricing framework for India.

Certain Medical devices are categorized as “essential commodities” under the Essential Commodities Act 1955. The NPPA oversees their pricing by including them in the National List of Essential Medicines (NLEM) and setting price caps under the Drugs (Prices Control) Order (DPCO) 2013. Examples of regulated devices include:

• Coronary stents
• Knee implants
• Disposable syringes
• Blood pressure monitors

Status of Equipment in India

Sophisticated medical equipment requires skilled technicians for proper installation, operation, and maintenance. However, rural India faces challenges such as unreliable electricity, inadequate infrastructure, and a lack of clean, dust-free environments, leading to frequent equipment failures. Nearly 50% of Primary Health Centers (PHCs) lack assured power supply, and 35% of life-saving devices constantly need repair, putting patients’ lives at risk. The skill gap is a critical issue, and over 85,000 repair technicians and engineers are required nationwide. Addressing this gap is essential to improve healthcare access, reduce costs, and enhance the quality of care while creating sustainable livelihoods.

The report focuses on future advancements and addresses gaps in the regulation, standardization, and affordability of existing medical devices. By improving oversight, strengthening surveillance, and aligning with international standards, the recommendations aim to enhance the safety, quality, and accessibility of medical devices already in use in India’s healthcare system.

1. Regulation of Existing Medical Devices

• Observation: The current regulatory framework under the Drugs and Cosmetics Act, of 1940, treats many medical devices as drugs, leading to inadequate oversight of their unique requirements.
• Recommendation: The report emphasizes the need to regulate all existing medical devices through a standalone Medical Devices Act, ensuring comprehensive standards for safety, efficacy, and quality.

2. Standardization of Existing Devices

Discussed above

3. Post-Market Surveillance

• Observation: The current post-market surveillance system for medical devices is weak, leading to delayed action on adverse events related to existing devices.
• Recommendation: Strengthen monitoring systems to track the performance and safety of devices already in use, ensuring timely recalls or corrective measures when necessary.

4. Price Regulation of Existing Essential Devices

• Observation: Certain essential devices like stents and knee implants are regulated under the National Pharmaceutical Pricing Authority (NPPA), but many existing devices remain outside price control.
• Recommendation: Expand price regulation to include more essential medical devices, ensuring patient affordability.

5. Addressing Imported Devices

Discussed above

6. . Existing Infrastructure Challenges

• Observation: The limited infrastructure for evaluating and certifying the quality of existing medical devices hampers regulatory enforcement.
• Recommendation: Invest in testing labs and regulatory infrastructure to improve oversight of devices currently in the market.

The conclusion highlights the significant impact of India’s reliance on imported medical devices on affordability and underscores the proactive measures by regulatory bodies like the NPPA and the Department of Pharmaceuticals to address this challenge. Efforts to establish a transparent and fair pricing framework aligned with international standards aim to balance industry demands while improving accessibility. The Standing Committee’s recommendations seek to create a robust ecosystem for the medical device sector by addressing regulation, affordability, and innovation challenges.

The call for a dedicated law and regulatory authority for medical devices underscores the pressing need to advance this sector. Such a law should be thoughtfully designed to streamline speedy dispute resolution related to medical devices. India’s scientific achievements reach to space exploration, and leveraging technological advancements in the medical device industry should be easy. The sector’s growth holds the potential to unlock new opportunities in education, research, and employment. While implementing these recommendations can revolutionize patient care by ensuring medical devices are safe, affordable, and accessible, the focus must also shift toward strengthening maintenance and manufacturing processes through significant revamping. This holistic approach will enable the healthcare system to provide more equitable and effective services, ultimately improving the quality of life for millions nationwide.

References

1.     Understanding The Regulatory Requirements For Medical Devices In India (n.d. ) retrieved from the website

2.     Medical Devices: Regulation and Control: Standing Committee Report (n.d), retrieved from the PRS Website

3.     India’s Healthcare Lacking More than Just Equipment (n.d), retrieved from the Sambhav Website

AUTHOR: Jyoti Srivastava