Vision & Strategy

Retail & Institutional Sales -20,000 Cr. DisposablesConsumables Surgical Instruments Medical Electronics Hospital Equipment Implants DiagnosticsMedical Devices – Market Size

}Fiscal –Custom Duties favor Imports . Why ?   }Regulatory –Regulations favor Imports. Why?   }Internal Non Tariff Export Barriers . Why ?   }Consumer Protection –Retailers favor Imports   Why?Key Factors impacting Growth

0 2000 4000 60008000Disposables Consumables Surgical Instruments Medical Electronics Hospital Equipment Implants Diagnostics-Reagents Imports IndegenousImports Domination

}Why Custom Duties on Medical Devices Lower than on their Raw materials? }Why No SAD on Imports? }Why Imports of over 2000 Medical Devices not covered under Regulations? }Of only 14 Medical Devices under Drugs Act   why regulations favor imports? }Why Max Retail Price Labeling not enforced on Unit Packs of Imports? }Why Public Health/Insurance insist US FDA approval ?

Self Created Impediments!
Turnover (Cr.)
Distribution %
0-10 70%
10-50 20%
50-100 5%
100-500 3%
500+ 2%
Industry Status
AIMED 20117 0 10 20 30 40 50 60 70 0-10 Cr. 10-50 Cr. 50-100 Cr. 100-500 Cr. 500 + Cr. % Distribution AIMED% Distribution }Majority Exporting units comply with ISO13485 and Certificate/Registration with GHTF countries }Moving up the Value Chain }Moving up the Quality & Technology Ladder }“Top 5” Preferred Source Status achieved in: 1)Syringes6)Gloves 2)Needles7)Intraocular Lens 3)I.V. Cannulas /Catheters8) Hydrocephalus Shunt 4)Contraceptives 5)Surgical Blades Status - Industry

  CostCompetitiveness,Massproduction,Economiesofscale,TrainablelargeLaborPool,TechnologyAccess–noconflictingnationalinterest.StronginMechanical,Software,BiotechnologyEngineering RespectforSystem&Documentcompliance.
Weakness LowR&Dbase,RelianceonHighCostimportedinputs. HighCostMultipleTaxes.Limitedproductsregulated.Qualityperceptionlow-middleend.
Opportunity Value for money competitiveness, high growth sales in global markets.
Threat RegulationslimitingmarketaccessifusedasProtectionistNonTariffBarrier

}Upgrade §manufacturing & testing facilities §management competencies §quality management systems }Get ISO 13485 certification from internationally accredited organizations }Get registration and certification from a GHTF member country }Self regulation/Dialog with MOH to assist in building regulatory framework }Aim for Non Price Competitiveness Path for the Industry

}MoH -Creation of Dept. of Medical Devices   -Regulation of Medical Devices -Buy Indian Public Healthcare Policy }MoF-Fiscal, Correct Inverted Duty Structure }MoCA -Safeguard Consumers }MoC –Est. Medical Export Promotion Council   -Review Norms of FDI Policy. }MoST & MoIT -Infrastructure / Support system for R&D /Indigenous Development Road Map for Govt.
}Administrative Ministry ? Dept of Medical Devices? }Establish Medical Export Promotion Council }SEZ –Medical Technology Parks }Existing Clusters –Delhi NCR, Ahmadabad etc }MDA & MAI –15 Cr Cap to be waived }MEDIFEST, MEDICA ,ARABHEALTH -trade fairs Path for the Govt.-accelerate exports

}Africa centric –PEPFAR US AID –Replication }China –17% subsidy on medical products exports Vs. INDIA2-3%reduced from 4-5%! }MADE IN INDIA –INDIAN registered BRANDS 3%Additional FMS/DEPB }25 % subsidy on Foreign trademark Registration fees and 50% for Product Export acceleration

}Easy availability of free sales certificate   -DGFT Zonal offices (untrained!) -DCGI EXISTING UNITS ON BASIS OF CE }Status Holder Privilege –Green Card for NOC   Waiver Debottlenecking Exports
}Inspection of foreign Co by Regulator in non-GHTF countries –level playing field }Anomalies in Tariff to be corrected :   -Reverting SAD from 0% back to 4% -Increase Basic Duty on Devices to Min.10% -Increase Basic Duty on Parts of Devices 7.5% -Keep Max. Basic Duty on Raw Material 5% -Increase Excise Duty to 8% (90.18, 90.21) }Country of Origin –Enforce labeling }Max Retail Price –Mandatory on unit pack }2/3rdResidual shelf life De accelerating Imports

}Need for Level Playing Field   }Amend Rules under Weights & Measure Act   }Enforce Labeling of Max. Retail Price on Unit Pack on Imports not only on shelf box.   }Enforce Labeling of Country of Origin on Unit Pack Dept of Consumer Affair

}FDI permitted for putting MFG units not for trading.   }MNC 100% owned subsidiary should not be permitted to trade if Mfg Revenue less than 60%   }Restrict Max Shareholding to 40% if Indian subsidiary trading revenue will be over 40% Restrict Shareholding of MNC’s
}All public health tenders , price Benefit:   5% benefit for ISO 13485 certified Indian Co. 15%benefit for Indian origin products }Accelerated Depreciation at double rate for income tax calculation due to high capital cost for ISO 13485 certified co. }Modernization fund –minimal interest rate loan to upgrade plant/clean room facilities –5 years AIMED Encourage BUY Quality Indian Mfg.

}14+8 Devices Notified as Drugs }Exports Restricted –Internal Non Tariff Barrier }Devices treated as Medicines }Imports permitted without Factory Inspection }Import Lic. By DCGI }Mfg. Lic. After Joint Factory Inspection. }Mfg Lic. By State Drug Controller + Zonal +DCGI Current Status Regulations

ths Reliance on Factory Inspections for domestic producers Access to pool of inspectors well versed with GMP w.r.t Pharmaceutical Industry, Strong legal framework
Weakness Limited/noknowledgeofdiversenatureofmanufacturingtechnologies Limitedknowledgeofregulatingnonsterilemedicaldevices Regulatoryframeworknotdeveloped,structuredformedicaldevices LackofaccreditedTestingfacilitiesforproductconformityverification Noinspectionsforoverseasmanufacturers, lackstransparency&guidance
Opportunities Up gradation of Regulatory framework on GHTF guidelines Facilitate Respect & Growth Of Indian industry
Threats Devices from Non Regulated manufacturer may harm patients Non Recognition by overseas regulators
SWOT ANALYSIS – Current Regulatory Mechanism

}Imports –Inadvertently Preferential treatment   -single window licensor (CLAA) Vs. Mfr. Application at 3 levels (STATE,ZONAL,CLAA) -NO Inspection Vs. Joint Inspection -Compliance to ISO 13485 & TECH FILE Review Vs.Ambiguous Guidelines( Draft Stg.)! -3 to 6 months Vs. 1 to 3(++ years for implants ) -Lack of Unambiguous Written System/Response Mechanism For Mfrs.,& Exporters e.g. Free Sales Certificates, Brand Addition,NOC’s BURNING ISSUES since 2005!
}Amendment of Drugs & Cosmetics Act to be Drugs, Cosmetics & Medical Devices Act }Regulatory controls to be split , shared anddelegated between Centre, State , CAB’s }E.g. Centre for Policy , Licensing , Registration for Mfrs/Exporters/Importers }Factory Audits QMS delegated to CAB’s }State Authorities to Regulate Logistics & Sales }Move for an Autonomous NRA }Involvement of ALLStakeholders Solutions Desired – Long Term
}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 Indian Healthcare Regulatory Authority –Drugs, Cosmetics, Medical Devices & Diagnostics }Domain Specific Recruitment & Specialization Solutions Long Term - 2
}Finalization & Issuance of Guidelines for   -Application & Grant of Mfg. Lic. -Initial Factory Audit of QMS & Infrastructure. -Export Labeling -Application of Additional Brand -Application for Neutral Code No. -Application of Free Sales Certificate -Import of Non sterile Assembled Devices -Clinical Evaluation -Adverse Event ReportingSolutions - Short Term
}Work with Industry in transparent manner }SuperviseDirectly / Through Accredited agencies }Aim to promote public trust in Indian Industry }Provide Guidance& Advice   -to meet legal obligations -safety of consumers }FacilitateGrowth of Industry }Facilitate Introduction of Innovative & Emerging Technologies VISION - Role of the Regulator
}Regulations to provide non ambiguous legal requirements & guidance on best practices }Reliance on preventing problems }Evaluation of Risk & Hazard by MDR for suitable corrective & preventive action (CAPA) }Reasonable time for addressing issues and implementing CAPA }Minimal/No reliance of judiciary and legal criminal action on registered units }Reliance of Judiciary/ Police and criminal action only on non registered units. }Regulator to have POWERS for putting things RIGHT If Things go wrong …..

}Up gradation of test Labs }Access to low cost testing }Accreditation of Labs }Training on Regulatory Requirements   -Short Term Courses @ NIPMER -Distance e –Learning }Auto -Adoption ofISO standards by BIS }Encourage Academia –Industry interaction }VC Fund for patentable products }Tax benefits to Incubator Co. Capability Development
AIMED Value Addition & Innovation

AIMED 201128 TECHNOLOGY DRIVER BARRIER INCENTIVE Money Reputation Market share Marketing Strategy Volume Economics Political policies Fiscal Policies Regulatory Environment Funds Political Policies Fiscal Policies Regulatory Environment Fear of Partnership Reputation Loss Corruption Fear of monopolizing Funds Fiscal Policies Limited competition Long Term Agreement Transparent Bidding Public-Private Partnership R&D Access Scientific Capacity Reputation Intellectual Property }China –Cluster + Modernization Subsidy approach , Govt. Driven }USA –Public & Private Partnership + Contract mfg+ Large MNC }Germany/UK/Italy –MSME }Israel –Venture Capital funding for I.P.R. and Incubator friendly environment –Small Co }Australia –Fund Access for Innovative Product development –Small Co. }OLD USSR –Socialist Public Sector Large Corporations ? Lessons from others

ou! Lets Work in Partnership to WIN THE WORLD ! AIMED 2011 30  
Copyrights 2009. Association of Indian Medical Device Industry.