Task Force Urges Sweeping Reforms To Bolster Indian Device Sector

April 17, 2015

A public-private task force in India is urging the government to purchase Indian-made medical devices when possible to boost growth in the domestic medtech industry.

To support newer companies, the Task Force on the Medical Devices Sector in India also recommends that the government relax rules encouraging only firms that have been in business for at least three to five years to bid on government contracts. Preference also should be given to devices made by smaller companies, says a report released by the group this week.

Pricing for devices should be regulated separately from drugs and would be based more strongly on return on investment for manufacturers, the task force suggests. This would allow the government to consider the costs of a complete “basket” of devices associated with a single procedure, a move that would help to keep the industry viable. The group also calls for tax and duty reforms, including discounts on import duties, restrictions on the import of secondhand diagnostic tools and promotion of medical device exports.

These new policies should be supported by an independent facilitating body devoted to the medical device sector, the report says. This body would create benchmarks based on international best practices, develop public-private knowledge networks, and identify and prevent technical barriers to trade. In addition, the Department of Pharmaceuticals should be strengthened and renamed the Department of Pharmaceuticals and Medical Devices, the task force advises.

The report also calls for the government to build infrastructure to support medical device parks with common medical device testing facilities that would be funded at least partially by industry. One such park is already planned for Chennai.

To speed technological upgrades, the government should create a system that would allow device companies to exchange intellectual property, the task force adds. Incubation centers should be established and more government seed money provided for start-ups, the group adds.

Part of Make in India

The secretary of the Department of Pharmaceuticals established the task force last fall to bolster Prime Minister Narendra Modi’s Make in India campaign. The group sought input from government, industry and consulting groups before issuing its recommendations.

Rajiv Nath, forum coordinator of device industry group AIMED praised the task force’s report. “It sets a clear and definite road map for creation of a vibrant ecosystem for manufacturing of medical devices in the country,” he tells IDDM. If the recommendations are implemented quickly and thoroughly, they could allow India to end its dependence on device imports in just a few years, he adds.

Recommendations concerning financial support to manufacturing units, reversal of inverted duty structure, an MRP-based taxation system, creation of a separate department and separate law book for medical devices were of particular significance, Nath says. Still, additional measures — such as higher duties on imported finished goods — may be needed to fully encourage the sector, he adds.

View the report at www.fdanews.com/04-20-15-taskforce.pdf. — Elizabeth Orr