25/06/2020 - Government Policies

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KEY POINTS

Healthcare being the most critical, India has to evolve imaginative policies and usher in reforms that will accelerate its economic revival. Developing our own domestic medical industry is the best way forward.

The Department of Pharmaceuticals has recognised that indigenous manufacturers have a disability of 12-15% on account of:
1. Lack of adequate infrastructure, supply chain and logistics;

2. High cost of finance;

3. Inadequate availability and cost of quality power;

4. Limited design capabilities.

·         There is no mechanism to address these disabilities in manufacturing of medical devices. The Department of Biotechnology (DBT), the Biotechnology Industry Research Assistance Council (BIRAC), the NITI Aayog and the Office of the Principal Scientific Adviser have been working to create an ecosystem for nurturing start-ups and incubators.

·         The Covid-19 crisis has shown that Indian medical device manufacturers can scale up manufacturing to tackle spiked demands for ventilators and other life-saving medical supplies.

·         For manufacturers, demand comes from local consumption or exports. Imports of medical devices are a negative demand as domestic purchasing power is diverted to foreign goods.

·         Converting negative demand to positive demand is the key, as successfully done in the policy of mobile phones and consumer electronics—in mobile phones, a nominal customs duty of 15-20% transformed the sector from 60 million handsets in 2014 to 290 million in 2018. The negative demand of medical devices can similarly be converted to positive demand.

·         The third area is addressing artificial inflation where labelled MRP of medical devices, instead of protecting consumers, has become a licence to charge full MRP, which may lead to profiteering at retail/hospital-end.

·         By rationalising trade margin over import landed price, a consumer can gain and not feel exploited post-Covid-19. This will also help Make in India, as already proven in stents and knee implants, and lead to demand creation for domestic manufacturing.

·         The penal system in the Drugs Act is a disincentive for medtech investors. The Act is not appropriate for innovative engineering products like medical electronics. Ventilators could not have been made by multiple new manufacturers in a matter of 3-4 weeks, had the Drugs Act already been applicable on ventilators.

·         An appropriate legal framework envisaged by the NITI Aayog is awaited as a medical devices law that would decriminalise most oversight and regulatory lapses and will have risk-proportionate penalties. This will encourage new entrants to venture into medical devices—as being engineering products and not drugs.

·         The Covid-19 pandemic has taught us to be self-reliant and self-sufficient first, and not seek solutions outside the country.

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Please review