July 31, 2023
India’s pharmaceutical industry, valued at $41 billion, stands as one of the largest in the world. Over the years, it has played a crucial role in offering cost-effective alternatives to Western products, particularly benefiting impoverished and developing countries.
The recent deaths of at least 66 children in the Gambia, attributed to cough syrups produced by Haryana-based Pharmaceuticals, have brought attention to the deficiencies in India’s drug regulatory system.
In order to align with evolving requirements, advancements in time and technology, it becomes imperative to replace the current 80-year-old Drugs and Cosmetics Act of 1940 with modernized laws and stringent regulatory standards for the pharmaceutical industry.
In 2022, the Ministry of Health and Family Welfare (MoHFW) released a draft of the New Drugs, Medical Devices, and Cosmetics Bill 2022. The draft bill intended to replace the outdated Drugs and Cosmetics Act of 1940, to cater to evolving requirements and advancements in technology. The bill acknowledges the need to review and update outdated laws while also emphasizing the significance of regularly repealing and amending current legislation.
Transparency: The proposed Bill aims to ensure the highest possible regulatory standards and transparency in overseeing the quality, safety, efficacy, performance, and clinical trials of new drugs, investigational medical devices, and in vitro diagnostic medical devices, including AYUSH drugs.
Replacing outdated legislation: The legislation intends to replace the outdated Drugs and Cosmetics Act of 1940 and introduces new definitions for various terms, such as clinical trials, over-the-counter drugs, manufacturers, medical devices, new drugs, bioavailability study, investigational new drugs, and imported spurious drugs and medical devices. Moreover, the bill addresses the regulation of online pharmacy stores. This stands in contrast to the previous 1940 Act, which regulated medical devices on the same level as drugs.
Demarcated regulation: To enhance the regulatory process, the Centre is also suggesting the establishment of separate advisory boards namely, in the Drugs Technical Advisory Board (DTAB) and the Medical Devices Technical Advisory Board (MDTAB). This will introduce a separation in the regulatory process for drugs and medical devices, meaning that the treatment of drugs and medical devices will be distinct. This change adds granularity to the regulatory approach, ensuring that drugs and medical devices are regulated differently.
Reducing imports: To lessen India’s reliance on the importation of expensive medical equipment and foster domestic production, the government is formulating a new and comprehensive strategy. This will not only boost the country’s self-sufficiency in healthcare technology but also enhance the accessibility and affordability of critical medical equipment for the entire population.
Encouraging essential technology: The draft policy’s main priority areas consist of encouraging essential technology projects and exports through tax refunds and rebates, setting up a single-window clearance system for licensing medical devices, identifying crucial suppliers, de-risking and decarbonizing the supply chain, and more.
Framework for pricing regulation: The draft policy also suggests setting aside a specific fund to promote collaborative research among established industry players, reputable academic institutions, and start-ups. Additionally, it will establish a framework for consistent pricing regulation, ensuring that high-quality and effective medical devices are accessible to all citizens at affordable rates.
Reducing costs: The Department of Pharmaceuticals, under the Ministry of Chemicals and Fertilisers, had proposed the adoption of public-private partnerships to reduce healthcare costs, enhance efficiency, and facilitate quality improvements in domestically manufactured medical devices. This initiative came in response to the draft National Policy for Medical Devices, 2022.
Meeting expectations: The Proposed Legislation marks the initial stride towards reforming India’s current approach to drug and cosmetic regulation. While its primary purpose is to revamp the Drugs and Cosmetics Act, much of it mirrors the existing legislation. Nevertheless, through the Draft Bill’s incorporations, exclusions, and objectives, there is an anticipation of enhancing quality, boosting consumer confidence, and meeting the expectations of stakeholders.
Heavy out-of-pocket expenditures: Indians spend more of their own money on healthcare than some of the world’s poorest nations. The obvious issue is why a nation that prides itself on being the “Pharmacist of the World” renders healthcare so prohibitively expensive for its citizens. The majority of what Indians spend on healthcare is on medications (72% in rural areas and 70% in urban areas), hospitalization (including admission, testing, and consultation), and outpatient expenses (such as transport and meals). According to the “Cost of Health Services in India” study released in November last year, tertiary facilities had the highest unadjusted cost per admission ($5690, $75 USD), followed by private facilities ($4839, 64 USD), and district hospitals ($3447, 45 USD). Whether the Bill will be able to address this matter still remains undetermined.
Regulatory framework: The primary objective of the draft bill is to establish comprehensive regulations governing the marketing of medical items in the country. However, an important question that needs to be addressed is whether these regulations will ensure that the medical items are safe, effective, and meet the predetermined criteria of quality.
Lack of distinction between standards: In the precolonial era Drug and Cosmetic Act, the second schedule recognized only legally binding standards for drugs, resulting in the absence of any standards for medical devices and no recourse for prosecuting manufacturers of such devices. The new draft should thus aim to fill this void by introducing specific provisions to regulate medical devices, cosmetics, clinical trials, and other related areas more effectively.
Areas with uncertainty: The Draft Bill appears to be well-suited for the industry in this aspect. However, it may be necessary to update the Medical Device Rules (MDR) to align it with the provisions of the Draft Bill. Without appropriate transitory provisions that offer clarity on the alignment with the MDR, the passage of the Draft Bill could potentially lead to uncertainty.
The draft bill proposes new definitions for various terms, including clinical trials, over-the-counter drugs, manufacturers, cosmetics, medical devices, new drugs, bioavailability studies, bioequivalence studies, investigational new drugs, proprietary medicine, and imported spurious drugs, among others.
Notably, the draft bill also introduces a separate definition for medical devices, encompassing all types of diagnostic equipment and their software. It also includes implants, devices designed to assist with disabilities, life support systems, disinfection instruments, and any related reagents or kits.
In Chapter II of the draft bill 2022, a provision has been introduced for the establishment of a ‘medical devices technical advisory board’ by the ministry. This board will consist of medical professionals and individuals possessing technical expertise in the field of medical devices. It will include representatives from the Health Ministry, Department of Atomic Energy, Department of Science and Technology, Ministry of Electronics, and DRDO, as well as experts in biomedical technology, biomaterials, and polymer technology. Currently, decisions pertaining to medical devices are handled by the ‘drugs technical advisory board’.
Chapter III of the draft bill 2022 stipulates that the centre is empowered to regulate or restrict the import of drugs in the interest of the public, particularly in cases where the drug is essential to address emergencies caused by epidemics or natural disasters. Additionally, if the use of any drug or cosmetic poses potential risks to human beings or animals or if a drug fails to demonstrate the therapeutic value claimed for it, the government has the authority to prohibit the import of such drugs and cosmetics through an Official Gazette notification, in the public interest. Furthermore, the chapter outlines the penalties for importing drugs or cosmetics that contravene the proposed regulations aimed at safeguarding public health and interest.
Under Chapter IV of the draft bill 2022, the bill added the new provision that clinical trials and clinical investigations of drugs and medical devices will need permission from the central license.
Chapter V of the draft bill of 2022, introduced a significant milestone by including, for the first time, a distinct section dedicated to modern science and technology for the advancement of innovative drugs and devices within the AYUSH branch of medicines. This separate segment aims to regulate Sowa Rigpa and Homeopathy, ensuring their integration with contemporary scientific practices and standards.
DISCLAIMER: The opinions expressed herein are entirely those of the author(s). Swaniti makes every effort to use reliable and comprehensive information, but Swaniti does not represent that the contents of the report are accurate or complete. Swaniti is a non-profit, non-partisan group. This document has been prepared without regard to the objectives or opinions of those who may receive it.
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