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Aimed & Regulatory Update

Domestic MedTech Industry Upbeat About New Procurement Policy That Feverous Manufacturers With Domestic Content

The Department of Pharmaceuticals (DoP) move gives priority to bidders of government contracts that use more local content. Around 1500 manufacturers who make medical devices in India and sell to public healthcare agencies are beneficiaries of the new procurement policy.

Domestic medical device manufacturers have hailed the new healthcare procurement policy introduced on October 29, 2021 by the Department of Pharmaceuticals (DoP) that gives preference to manufacturers with over 50% domestic content in the product.

DoP move gives priority to bidders of government contracts that use more local content. The revised order has introduced a concept of Class-I, II and non-local suppliers, based on which they will get preference in government purchases of goods and services.

“Around 1500 manufacturers who make medical devices in India and sell to public healthcare agencies are beneficiaries of the new procurement policy. The total public healthcare market for medical devices is estimated to be over Rs 30000 Crore. Rs 110,000 Crore (15 Billion $) is the market size estimated for India. The Indian industry’s market share of public healthcare is estimated at 20 % to 25%,” according to the Association of Indian Medical Device Industry (AiMeD).

Rajiv Nath, Forum Coordinator, AiMed further explains, “The new policy changes of giving preference to Quality over L1 (lowest bid prices) is especially of strategic impact for healthcare products where quality is very critical to users. The market was 80% to 90% import dependent but with the stated preference to make in India products, the market share of domestic manufacturers in public healthcare can now go up from 20% to 30% to around 40% to 50%. This will encourage more foreign investment by overseas manufacturers who will seek to protect their existing market share in India.”

This had been a long standing request to the Government of India to move from L1 (lowest price) procurement to Q1 (quality preferred) or R1 (rating preferred- rating based on service, quality and price performance).

He further added that the market share can improve if public healthcare procurement preference is also considered for Design India certification to encourage homegrown innovation and R&D in India.

Class-I local suppliers will get the most preference in all government purchases because their domestic value local content addition is 50% or more. They will be followed by Class-II suppliers, whose local content value addition range is more than 20% but less than 50%.

For verification of local content, the Class I and II suppliers shall be required to indicate percentage of local content and provide self-certification that the item offered meets the local content requirement norms.

The Concept of Class-I supplier has been introduced so that in cases where local suppliers are to be given the order, even within that group one should give first preference to the ones whose domestic value addition is significantly high.

Under the revised public procurement guidelines, it is envisaged that all Central Government departments, their attached or subordinate offices and autonomous bodies controlled by the Government of India should ensure that purchase preference will be given to domestic suppliers.


DoP Releases Draft Policy To Catalyse R&D And Innovation In Pharma-MedTech Sector

The Department of Pharmaceuticals (DoP) has come out with a draft policy to catalyse research and development (R&D) and innovation in pharmaceutical and medical devices sectors in India.

The draft policy aims to encourage R&D in Pharma-MedTech sector, and promoting innovation for India to become a leader in drug discovery and innovative medical devices through incubating an entrepreneurial environment. The department has invited comments from the stakeholders by November 6, 2021.

The policy has a ten-year perspective, and will be implemented through an Action Plan defining roles, responsibilities, activities, targets and timelines. The Action Plan will be broken down to five year and annual activities for ease of implementation. A Highlevel Task Force will be set up in the DoP to guide and review the implementation of the policy.

The policy focuses on simplifying regulatory processes to enable rapid drug discovery and development and innovation in medical devices; exploring mechanisms to incentivise private sector investment in research and evaluate various funding mechanisms including budgetary support, venture capital, CSR funding etc., and fiscal incentives to support innovation; and strengthening the R&D ecosystem through increased collaboration between industry and academia in order to develop mechanisms to dovetail research as per requirement of the industry.

On the regulatory front, which is currently geared towards assuring safety and efficacy and not differentiate in favour of innovation, the policy contemplates to create a regulatory bias in favour of innovation and original research by mandating all regulators (as there are several regulators and agencies involved in the approval processes) to work together to reduce process overlapping and establish timelines for requisite approvals.

A Common Specific Procedure Pathway (CSPP) will be provided for each class of product, including checklists, prescribed timelines, parallel processing, joint inspections, automatic and deemed approvals and sharing of data across regulators. The aim is to bring down the time taken for regulator approvals for innovative products by at least 50 per cent within the next two years.

It also proposes to create a single end-to-end digital portal as a single window to be hosted by Central Drugs Standard Control Organisation (CDSCO) as an interface between innovator and regulator. Artificial Intelligence and natural language processing will be used to automate dossier review and document management workflows.

The capacity of CDSCO will be strengthened by setting up project management roles to provide dedicated support to the industry innovators, including building in-house expertise in bio pharmaceuticals and high end medical devices, specialisation to be created or in-sources to handle oversight of regulatory functions in respect of new biological entities and new chemical entities, biological, imaging medical technologies, new materials, tele-diagnostics, AI, machine learning based innovations, sensors etc. National Pharmaceutical Pricing Authority (NPPA) will be supported to develop greater expertise in pricing of new innovative products, while pursuing affordability as an overall objective.

The government would undertake a review of the multiple legislation’s impacting R&D in pharma and medical devices sectors with a view to remove inconsistencies and redundancies. This could include measures such as exemption of products that are cultured and cultivated artificially under controlled conditions and not impacting natural resources from the Biological Diversity Act, review Drug Price Control Order 2013 to enable differential pricing for innovation with therapeutic benefits, among others. Institutional bodies need to be empowered for approving preclinical protocols, making Institutional Animal Ethics Committee (IAEC) to be on par with Institutional Biosafety Committee (IBSC) to permit regulatory approvals for pre-clinical activities. It also proposes to enable joint inspection by CDSCO and State drug authority, to be conducted only once, in parallel, in case of vaccines and biological for a particular class of product, for marketing authorisation.It also proposes to review the legislation enabling regulation of all medical devices in a phased manner with a lead time of 12 months to manufacture each category of medical devices. It also advises measures to create dedicated licensing provisions for Ayurveda, Siddha and Unani drugs and explore providing Ayurveda WHO licensing authority to have the power to issue WHO GMP certificate.

The second focus area of the policy, on funding of innovation and incentivising investment, the DoP kept the provisions open for stakeholder’s consultations before adding to the draft. Regarding the third focus area in the policy, which is enabling an ecosystem for innovation, the policy proposes to strengthen industry-academia linkages by strengthening academic infrastructure and integrating it into a coherent framework for building skilled manpower for the industry. Modernisation and strengthening of curriculum with future ready technology like AI, Biologics, continuous flow technology and others, institutionalising industry representation in NIPERs and providing varying degree of financial and managerial involvement, integrating pharma education at graduate, post graduate and doctoral levels under NIPERS and enhancing expertise in biopharma education, attract Global educational Institutions of eminence to create centres in India, purposeful investments n few priority institutes to build Centres of Excellence on med-tech innovation and R&D.

The draft policy also proposes collaboration across research and educational institutions and sectors, setting up of an Inter- Departmental Research Council on Pharma, creation of a dedicated innovation hub etc.

The Action Plan will list activities in four categories namely Policy decisions, Program execution, Collaboration and Communications. The Policy Action Plan will cover a five-year period with annual plans with attendant financing framework. A monitoring and evaluation framework will also be designed with rational target setting, resource optimisation and portal based reporting mechanism. An Industry led Advisory Committee will also be set up for continuous feedback on the implementation and monitoring. Independent evaluation would be carried out at prescribed periodicity against the defined outcomes, it added.


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