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Explained: India’s draft medical devices policy, and why it is needed

The government is proposing a new policy to reduce India's dependence on import of high-end medical devices. What is the need for such a policy, and what are the key focus areas? How big is the medical devices sector pegged to be?

In the Intensive Care Unit of a hospital in Mumbai amid the Covid-19 pandemic. Nearly 80 per cent of the medical devices currently sold in the country are imported. (Express Photo: Amit Chakravarty, File)

The government is proposing a new policy to reduce India’s dependence on import of high-end medical devices. Some of the proposals include incentivising the export of medical devices and related technology projects through tax rebates and refunds, increasing government spending in “high-risk” projects in the medical devices sector, and a single-window clearance system for licencing medical devices.

In an approach paper to a draft National Policy for Medical Devices, 2022, the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilisers has proposed adopting public-private partnerships to reduce the cost of healthcare, drive efficiency, and aid quality improvements in medical devices manufactured in the country. It is also proposing enabling a pricing environment with no price control on newly developed innovation in the sector.

What is the need for such a policy?

Nearly 80 per cent of the medical devices currently sold in the country are imported, particularly high-end devices. Indian players in the space have so far typically focussed on low-cost and low-tech products, like consumables and disposables, leading to a higher value share going to foreign companies.

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With the new policy, the government aims to reduce India’s import dependence from 80 per cent to nearly 30 per cent in the next 10 years, and become one of the top five global manufacturing hubs for medical devices by 2047.

India’s medical devices sector has so far been regulated as per provisions under the Drugs and Cosmetics Act of 1940, and a specific policy on medical devices has been a long standing demand from the industry.

In February 2020, the government ​​notified changes in the Medical Devices Rules, 2017 to regulate medical devices on the same lines as drugs under the Drugs and Cosmetics Act, 1940. This was necessitated after revelations about faulty hip implants marketed by Johnson & Johnson, exposing the lack of regulatory teeth when it came to medical devices.


The government said the transition from partial regulation of selected medical services to the complete regulation and licensing of all medical devices is underway, and is expected to be completed by October 2023, requiring more clear articulation in terms of quality assurance and certification.

The policy also aims to increase India’s per capita spend on medical devices. India has one of the lowest per capita spend on medical devices at $3, compared to the global average of per capita consumption of $47, and significantly lower than the per capita consumption of developed nations like the USA at $415 and Germany at $313.

What are the key focus areas of the draft policy?


The key focus areas of the draft policy include incentivising core technology projects and exports through tax refunds and rebates, creating a single-window clearance system for licensing medical devices, identifying critical suppliers, de-risking and de-carbonising the supply chain, promoting local sourcing, encouraging cross-industry collaboration, creating a central pool of vendors and workers, establishing a dedicated mechanism for the local industry’s engagements with international regulatory agencies, and increasing share of medical technology companies in research and development to around 50 per cent, among other things.

It also proposes to allot a dedicated fund for encouraging joint research involving existing industry players, reputed academic institutions and startups. It will also incorporate a framework for a coherent pricing regulation, to make available quality and effective medical devices to all citizens at affordable prices.

“The NPPA (National Pharmaceutical Pricing Authority) shall be strengthened with adequate manpower of suitable expertise to provide effective price regulation balancing patient and industry needs and incorporating innovation and life cycle costs as factors in pricing regulation of medical devices,” the government said. The Pharmaceuticals Department will also work with industry to implement a Uniform Code for Medical Device Marketing Practices (UCMDMP). The government has invited comments to the draft until March 25.

How big is the medical devices sector pegged to be?

According to the approach paper, by 2047, India is expected to be home to 25 billion-dollar medical technology companies and will achieve a 10-12 per cent global market share in the medical devices sector to arrive at a $100-300 billion industry.


Globally, the market is expected to reach $433 billion by 2025 and is currently dominated by the US which has a 40 per cent market share, Europe with a 25 per cent share and Japan with a 15 per cent share. The sector is also pegged for growth in other emerging markets like Thailand, where the medical device market was valued at $27 billion and is expected to grow by 8-10 per cent, and Brazil where the market is growing at a CAGR of 5.8 per cent. In China, the sector is valued at around $96 billion and has been growing at a pace of over 20 per cent for several years.

What are other measures to promote medical devices manufacturing in India?


The government has noted that the medical devices sector in India suffers from a considerable cost of manufacturing disability vis-à-vis competing economies, inter alia, on account of lack of adequate infrastructure, domestic supply chain and logistics, high cost of finance, inadequate availability of power, limited design capabilities, low focus on research and development (R&D) and skill development etc. It had launched the production-linked incentive scheme (PLI scheme) last year to encourage domestic manufacturing of high-end medical devices, and it approved applications of manufacturing commitments worth over Rs 730 crore for production of devices such as CT Scan and MRI machines, dialysers, anaesthesia unit ventilators, transcatheter aortic heart valves, stents, heart occluders, and others.

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First published on: 15-03-2022 at 14:30 IST
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