The Medical Devices Rules are a positive step towards making regulatory requirements more hassle-free and practical for manufacturers and importers alike...
The Ministry of Health and Family Welfare notified the Medical Devices Rules, 2017 ("Medical Devices Rules") on January 31, 2017 under the Drugs and Cosmetics Act, 1940 ("D&C Act"). However, the Medical Devices Rules have come into effect on January 1, 2018. These Rules seek to simplify the process of introducing new medical devices in the Indian healthcare market and simultaneously set standards for ensuring availability of high-quality medical devices for patient care and safety. The Rules have been framed to bring existing regulations in line with international practices and standards.
Medical Devices Rules: A forward step
With the Make in India campaign and endeavors of the Government for ease of doing business, the Medical Devices Rules have brought about sweeping changes in the regulation of medical devices in India
Prior to the legislature penning down the Medical Devices Rules, medical devices were governed by the rules framed under the D&C Act. However, the definition of a 'drug' under the D&C Act included only 22 (twenty-two) categories of medical devices, leaving a majority of them unregulated. Having said that, in view of the aforesaid, it became increasingly important to have a separate regulation to govern medical devices inter alia for the following reasons:
To specifically regulate medical devices in India given the lacunae in the earlier laws;
To have a full-fledged legal framework to bring the Indian medical devices industry in line with international standards for medical devices prevailing in the global market;
To simplify manufacturing, sale, distribution, and import of medical devices to encourage foreign investors to set up their industries in India.
With the Make in India campaign and endeavors of the Government for ease of doing business, the Medical Devices Rules have brought about sweeping changes in the regulation of medical devices in India as compared to the D&C Act in terms of obtaining licenses, conducting clinical trials, well-constituted bodies to conduct quality checks, and other progressive changes, a few of which are discussed below:
Covers a wide variety of medical devices: The D&C Act regulates only 22 (twenty-two) types of medical devices, leaving all other medical devices unregulated and unrestricted. With the expanded scope of the definition of the term 'medical devices', the Medical Devices Rules seek to bring a variety of medical devices within the ambit of the legislation. Further, with the Government retaining the flexibility to notify devices from time to time to be covered within the ambit of the Medical Devices Rules, the intention seems to expand the scope of application of the Medical Devices Rules as far as possible.
Usage and risk-based classifications: The Medical Devices Rules have classified medical devices based on their intended usage and risk associated with a medical device. Accordingly, medical devices are categorized as Class A – having low risk, Class B – having low-tomoderate risk, Class C – having moderate-to-high risk, and Class D – having high risk as against the D&C Act which had no such classification/categorization. Such classification was not contemplated under the erstwhile legislation governing medical devices.
Self-certification for Class A medical devices: The Medical Devices Rules have embedded a system of selfcompliance wherein manufacturing licenses for Class A medical devices will be issued without prior audit of the manufacturing site as long as the manufacturer undertakes activities in conformity with the established requirements. However, an audit of the manufacturing site would take place post approval by the concerned authorities in order to verify that they have complied with the quality management system.
Authorities for applications: Applications for grant of license for manufacturing Class A and Class B medical devices can be made to the concerned state authorities and applications for grant of license for manufacturing Class C and Class D medical devices should be made to the Drugs Controller General of India appointed by the Central Government. A single online portal has been created by the Central Government for applicants to submit applications online for manufacturing, selling, distributing, and importing medical devices.
License/registration relaxations: A huge relief for medical device manufacturers is the doing away with the periodic renewal of licenses. The Medical Devices Rules now grant licenses to importers and manufacturers in perpetuity unless they are surrendered or annulled unlike the erstwhile laws which granted licenses only for a period of 3 years. However, the Medical Devices Rules require a manufacturer or an importer to pay the license retention fee after every 5 years.
The Medical Devices Rules have done away with the requirement of a registration certificate for the registration of a foreign manufacturer, its manufacturing site, and products. The only regulatory requirement to be able to import and market products in India is to appoint an authorized agent in India and apply for an import license through it. This relaxation saves the hassle of making two separate applications (i.e., registration and import license) and also makes the obtaining of an import license, from a timeline perspective (the license would approximately take 9 months to be issued), more certain.
Streamlining the timelines to obtain licenses: The Medical Devices Rules have streamlined the procedure for obtaining licenses by prescribing specific timelines within which the concerned licensing authority will grant licenses and/or reject applications for manufacturing/import of medical devices. The Rules have also prescribed timelines within which the licensing authority has to approve or reject any major changes in the licensing particulars of the licensee. In case the licensing authority fails to communicate its approval or rejection to the applicant within the timelines stipulated under the Medical Devices Rules, then such applications will be deemed to have been approved by the concerned licensing authority.
Quality management systems: In order to verify and evaluate whether a manufacturer has adhered to the guidelines governing design, development, packaging, and servicing of medical devices, certain notified bodies, accredited by the National Accreditation Board for Certification and recognized under the Medical Devices Rules, are entitled to conduct such verifications and checks as and when required by the authorities.
Clinical trials: Clinical trials are tests that assess the efficiency and safety of medication by testing them on a group of people. The previous rules under the D&C Act required researchers to seek approval from the authorities for conducting clinical trials for academic purposes. However, as per the Medical Devices Rules, researchers are exempted from seeking approval from the concerned authorities if the following conditions are satisfied:
(a) the trial is approved by the ethics committee as constituted under the D&C Act, and
(b) the data generated is not intended for submission to the licensing authority.
The process pertaining to clinical trials has been relaxed under the Medical Devices Rules. As per the Medical Devices Rules, only two phases of trials are required unlike the erstwhile laws that required four phases of clinical trials, which made the trial process lengthy and cumbersome.
Labeling: Medical devices were exempted from complying with labeling requirements under the erstwhile laws. However, as per the Medical Devices Rules, certain labeling pre-requisites need to be fulfilled prior to the selling and/or distribution of medical devices in India. Further, the packages or containers of medical devices that have to be exported to other countries are required to meet specific requirements in relation to rules/laws pertaining to the labeling of medical devices of such countries to which the medical devices are proposed to be exported.
Shelf life of medical devices: The D&C Rules prescribe that all imported products should have a minimum residual shelf life of 60 percent on the date of import unless specific permission is obtained to the contrary. As compared to the erstwhile law, the residual shelf life requirement for imported devices has now been considerably relaxed under the Medical Devices Rules depending on the total shelf life claim of such medical
Foreign direct investment aspect
The Consolidated Foreign Direct Investment Policy, 2017 ("FDI Policy") permits 100% foreign direct investment in manufacturing medical devices with no pre-requisite and/or performance-linked conditions.
The Department of Industrial Policy and Promotion (DIPP) has made minor changes to the definition of medical devices under the FDI Policy vide Press Note No. 1 (2018 series).
The scope of the term 'medical devices' as per Press Note No. 1 (2018 series)1 issued by the DIPP appears to be broader than the scope of the said term under the Medical Devices Rules.
Additionally, vide Press Note No. 1 (2018 series), the DIPP has also done away with the following language:
"The definition of medical devices would be subject to theamendment in the D&C Act".
The above deletion is reflective of the government's intent to de-link the provisions in relation to medical devices under the FDI Policy from the D&C Act/Medical Devices Rules.
Application of the erstwhile laws vis-à-vis the Medical Devices Rules
As per the D&C Act, the definition of a 'drug' still includes medical devices and no amendments have been made to the D&C Act consequent to the notification of the Medical Devices Rules. The Medical Devices Rules have clarified that in case of any conflict between the provisions of Medical Devices Rules and the D&C Rules, the provisions of the Medical Devices Rules shall prevail. This could be interpreted to mean that to the extent there is no conflict, the D&C Act and Medical Devices Rules would apply to medical devices. Until the provisions with respect to medical devices under the D&C Act and Medical Devices Rules are harmonized, compliance under both the D&C Rules and the Medical Devices Rules would need to be ensured to the extent that there is no conflict. This anomaly would need to be fixed by legislators to avoid confusion and multiple regulations for medical devices, which could otherwise defeat the purpose of having a separate set of regulations to govern medical devices.
Overall, the Medical Devices Rules appear to be a welcome change given the host of relaxations as discussed above. The Rules promise a better regulatory framework that will hopefully put to rest consumers' and investors' apprehensions regarding the medical device sector. The Rules are a positive step towards making regulatory requirements more hassle-free and practical for manufacturers and importers alike.
1. This amendment in the definition of medical devices will be effective from the date of notification by the RBI.
Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.
Partner at Pioneer Legal
He is a transaction lawyer and has advised various multi – national companies as well as private equity funds in the areas of corporate law, commercial laws and other related laws. He has extensive experience in the mergers and acquisitions and private equity space with sectoral expertise pertains to logistics, financial services, healthcare, pharma, e-commerce, etc. He has been advising non-banking financing companies and small finance banks in its early stage investments.
Practice Lead- General Corporate and Advisory, DSK Legal
Senior legal consultant with over 10 years of experience and a demonstrated history of working in the legal services industry. Skilled in Corporate Law, Due Diligence, Mergers & Acquisitions, and Legal Research.