Medical Visas For India

Foreign nationals who wish to avail of medical treatment in India should obtain a Medical Visa (“MV”). Such a visa is granted to those seeking medical treatment in reputed or recognized specialized hospitals or treatment centers in India. According to information available on the official website of the government of India, MVs can be granted for different types of treatment including for neurosurgery, ophthalmic disorders, heart-related problems, renal disorders, organ transplantation, congenital disorders, gene-therapy, radio-therapy, plastic surgery or joint replacement surgery. Indian consular posts also consider MV applications for treatments under India’s traditional medical practices like Ayurveda.

Each application for a MV must clearly establish that the applicant has been advised specific medical treatment by a practitioner in his or her country of nationality or residence. It is advisable to add information regarding the potential treatment in India, a description of the credentials of the institute where the medical treatment will be administered along with a letter from this institute describing the treatment. If possible, the applicant should also add a letter from the medical practitioner in India who will administer the medical treatment confirming that the applicant is scheduled for the relevant treatment.

A MV is granted for a period of one year or for the duration of the treatment whichever is less. It is possible to obtain an extension if the treatment takes longer that a year or the anticipated duration. Additional extensions may be granted by the Ministry of Home Affairs in certain circumstances.

Up to two attendants who are close relatives of the patient are allowed to accompany the patient. Each of the accompanying individuals must obtain a separate Medical Attendant visa (“MXV”), which will be issued with the same validity as the MV. Both MV and MXV visas grant multiple entries of up to three visits. The processing times vary at different consular post. However, U..S born American citizens are usually granted a visa within two to three working days.

Registration in India

All foreign nationals on an MV or an MXV need to register with the Foreigners Regional Registration Office (“FRRO”) or the Foreigners Registration Office (“FRO”) within 14 days of arrival in India. The office where a foreign national should register depends on the place of residence of the individual. There are seven FRROs in all – one each in Hyderabad, Mumbai, New Delhi, Chennai, Bangalore, Kolkata and Amritsar. The relevant FRO is the office of the District Superintendent of Police in the relevant jurisdiction. Pakistan Nationals are required to register within 24 hours and Afghanistan Nationals are required to register within 14 days of their arrival in India (days should be counted from the date of arrival). There is no fee to be paid at the time of registration but if there is a delay in registering a penalty of US$ 30 will be levied.

In addition to the standard documents required for registration, individuals on an MV need to provide as evidence of the proposed treatment, a copy of a medical certificate or prescription issued by a recognized, reputed or specialized hospital in India. Individuals on MXV need to establish their relationship with the patient and also provide evidence of the treatment as set out above.

Conversion of Visas

Foreign nationals on a business visa or an employment visa in India can apply to convert their visas to a MV if they fall ill, are unable to travel and require specialized medical treatment in India. A change of visa may be required if the individual falls out of status, for example if he is on an employment visa and the visa expires. Such individuals will be granted an MV provided they fulfill all the criteria to be eligible for an MV and can provide a medical certificate from a government or government-recognized hospital. In such cases qualifying members of the principle applicant could apply for an MX, which is usually granted to co-terminate with the principle applicant’s MV. The MV and MXV will bear an endorsement stating that employment or business is not permitted.

The Medical Visa is a result of the Government’s recognition of the importance of medical tourism in India. It enables individuals to enter the country to procure medical treatment on valid visas.

Poorvi Chothani is the founder and managing partner of LawQuest, a law firm in Mumbai, India, and a Vice Chair of the India Committee. She is admitted to the New York State Bar and is a registered solicitor in England and Wales. Poorvi has been practicing law in India since 1984 and is admitted to the Bar Council of Maharashtra and Goa. She can be reached at info@lawquestinternational.com.

 

 

By Poorvi Chothani, Esq.

 

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Medical Malpractice Laws In India – A Summary

INTRODUCTION

India is widely known as a key and preferred, low-cost destination for medical tourism among other Asian developing and African countries. In recent years, it has also emerged as a key destination even for citizens of Western countries. As an example, in December 2011, Jack Jones, a Jehovah’s Witness whose faith barred him from having blood transfusions, made headlines for being the first US citizen to undergo a bloodless surgery in India.

This article provides a summary of the various medical malpractice laws in India with a focus on the Consumer Protection Act, 1986 (the “CPA”). Specifically, the article touches upon the various fora set up under the CPA, the tests applied by Indian courts when dealing with medical malpractice cases, and the relevant factors taken into consideration while awarding compensation, among other issues.

CONSUMER PROTECTION ACT

Briefly stated, a “consumer” who hires or avails of any “services” for consideration is entitled under the CPA to sue for any “deficiency in service” (not being services rendered free of cost or of a personal nature) and claim compensation. “Deficiency” is usually construed to mean any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance of any service.

Until 1996, legal proceedings against doctors for malpractice were relatively few. However, the decision of the Supreme Court of India in Indian Medical Association v. V. P. Shantha (AIR 1996 SC 550) brought doctors and hospitals under the purview of the CPA. After this judgment, doctors and hospitals were allowed to be sued under the CPA for any ”deficiency in service.”

Filing actions under the CPA

The aggrieved person would have recourse to the specially created consumer disputes redressal fora established under the CPA to establish any malpractice of a doctor or hospital and claim compensation.

Depending on the value of the services and/or the compensation claimed, the aggrieved person would have to approach (i) the District Consumer Dispute Redressal Forum (pecuniary limit of up to INR 2,000,000 or approx. USD 40,000); (ii) the Consumer Disputes Redressal Commission of each Indian State or province (the “State Commission”) (which enjoys pecuniary limit above INR 2,000,000 but up to INR 10,000,000 i.e., between approx. USD 40,000 to 200,000); (iii) or the National Consumer Disputes Redressal Commission, New Delhi (the “National Commission”) (pecuniary limit of any amount above INR 10,000,000 or approx. USD 200,000).

In terms of hierarchy, the State Commission is empowered to hear appeals against orders of the District Forum and the National Commission hears appeals from the State Commission. Appeals from the National Commission reside with India’s apex court, the Supreme Court.

Principles of Negligence

To determine deficiency in service of the doctor or hospital, the same tests applied to determine the tort law principle of “negligence” are applicable under the CPA. Accordingly, as per the Supreme Court’s decision in Jacob Mathew v. State of Punjab [(2005) 6 SCC 422)] the aggrieved person has to prove that there existed (i) a duty of care (between patient and the doctor), (ii) there was breach of such duty and (iii) but for the said breach, no injury would have been suffered.

Duty of care and standard of care

In the case of Laxman Balkrishna Joshi v. Trimbak Bapu Godbole (AIR 1969 SC 128), the Supreme Court held that a doctor owes a patient certain duties such as a duty of care in deciding what treatment to give and a duty of care in the administration of that treatment, among others. Accordingly, under Indian laws, a doctor is duty-bound to treat a patient with a reasonable degree of skill, care and knowledge.

On the issue of the standard of care to be adopted, it appears that to date, Indian courts have applied only the Bolam Test as laid down by English courts in Bolam v. Friern Hospital Management Committee [1957] 1 WLR 582]. Therefore, at present, neither a doctor nor any hospital may be held liable for medical malpractice if the doctor or institution acted in accordance with a practice accepted by a responsible body of medical practitioners skilled in that particular art.

Breach of duty and causation

Having established the duty and standard of care, the aggrieved patient next has to prove that there was a breach of the applicable duty and that the doctor had fallen below the accepted standard of care. The breach of the duty should then be linked to ‘causation’, i.e. a link should be established between the act of negligence and the injury suffered by the patient.

Indian courts have applied the ‘but for’ test in order to establish causation. In Geetu Sapra v. B. L. Kapoor Memorial Hospital [(2006) 3 CPJ 1], the ‘but-for’ test was applied to establish that if not for the defective equipment in the hospital, the patient would have not suffered the injury. In Samira Kohli v. Prabha Manchanda [(2008) 2 SCC 1] which deals with “informed consent,” the Supreme Court held that a doctor can be held negligent if proper consent is not taken and the failure to take consent is sufficient to determine causation.

Liability of Hospitals

In India, corporate hospitals (as opposed to government or village hospitals, which are unlikely to attract medical tourism) have been held liable by applying the tort law principle of ”vicarious liability” for any malpractice or ”deficiency in service” on the part of the doctors or nurses employed in such hospitals. Indian courts have ruled that a hospital cannot escape liability merely by arguing that it only provides infrastructural facilities and services of nursing and support staff to the consultant doctor and that the hospital cannot perform or recommend an operation on its own [Rekha Gupta v. Bombay Hospital Trust and Another (2003) 2 CPJ 160)].

In addition to holding hospitals liable for acts and omissions of doctors and nursing staffs, Indian courts have also held the hospital liable if it employs unqualified doctors or nurses [Professor P. N. Thakur v. Hans Charitable Hospital (2007) 3 CPJ 340)]. Further, hospitals have been held liable for ‘deficiency in service’ under the CPA for providing defective equipment [see Geetu Sapra case supra].

Compensation under the CPA

If it is determined that a doctor or hospital had been negligent, the aggrieved person is entitled to claim damages or compensation under the CPA. While determining the amount of compensation to be awarded under the CPA, Indian courts normally take into consideration the following key factors:

  • Pain and suffering endured by the patient (including the duration and intensity) as a result of the negligence of the doctor;
  • Loss of earnings or future earnings; and
  • Expenses incurred for the medical treatment.

One of the highest compensation finally awarded in a medical malpractice case is INR 10,000,000 (approx. USD 200,000). This was awarded by the Supreme Court in the case of Nizam Institute of Medical Sciences v. Prashanth S. Dhananka [(2009) 6 SCC 1].

Recently, the National Commission in Kunal Saha v. Sukumar Mukherjee and Others [Original Petition No. 240 of 1999 decided on October 21, 2011], awarded a compensation of INR 13,465,750 (approx. USD 270,000) to the plaintiff, out of which the hospital was directed to pay a sum of INR 4,040,000 (approx. USD 80,800) and the remaining amount by the defendant doctors. The National Commission apportioned liability based on the degree of negligence of each doctor and the hospital. In this case, the hospital was found to be one of the main negligent parties.

The Kunal Saha case supra is an instance of a ‘non resident Indian’ (“NRI”) (in this case, a resident of the U.S.) suing in an Indian court seeking compensation for medical malpractice by doctors in India. It is understood from press reports that Kunal Saha would be appealing the aforesaid decision of the National Commission before the Supreme Court seeking enhanced compensation.

It is pertinent to note that traditionally, Indian courts have not awarded punitive or exemplary damages and have been fairly conservative in awarding compensation in medical malpractice cases under the CPA.

Theoretically, an aggrieved person can file [an action either under the CPA or under tort laws alleging negligence]. However, since bringing the medical profession under the CPA in 1996, Indian courts have frowned upon civil suits filed in regular courts under tort laws alleging negligence by doctors and have encouraged actions to be filed under the CPA.

EXECUTION PROCEEDINGS AND REMITTING COMPENSATION ABROAD  

Under Indian law, upon award of final compensation (i.e., all appeal remedies have been exhausted), if the defendant has not voluntarily rendered compensation, the aggrieved party is entitled to commence proceedings to execute the award. In such proceedings, the court is empowered to seize and sell (by public auction) any property belonging to the defendant to ensure that the aggrieved person is paid due compensation. Courts are also empowered to imprison the defendant for any non-payment of the award.

In cases involving foreigners, since the proceedings are in India, a concern relates to actual remittance and receipt of the awarded compensation amount by the foreigners abroad. In this regard, it is pertinent to note that India’s foreign exchange laws have been substantially liberalised over the years and it should now be possible for bankers to rely on court orders to allow the defendants to remit the compensation amount to the aggrieved person abroad.

In case this is not possible, a prior approval of the Reserve Bank of India (RBI) may be required for the remittance abroad. Usually, obtaining such prior approval to permit the remittance by providing a certified court order should not be unduly problematic.

CRIMINAL NEGLIGENCE OF DOCTORS

In India, in addition to an action under the CPA, a doctor can also be liable under penal laws for criminal negligence if such doctor is shown to have been rash and negligent, resulting in the death of the patient [Section 304A of the Indian Penal Code]. A person convicted under Section 304A may be subject either to simple or rigorous imprisonment for a term of up to two years, or with fine, or with both.

The Supreme Court has in the cases of Suresh Gupta v. Government of NCT of Delhi [(2004) 6 SCC 422] and the Jacob Mathew case supra clarified the position regarding criminal negligence of doctors and held that an “extremely reckless act or omission by the doctor” would have to occur for the doctor to be held criminally negligent. In other words, the degree of negligence should be of a very high degree for a doctor to be held criminally negligent.

Insofar as criminal liability of hospitals is concerned, the present view appears to be that a hospital cannot be held criminally liable for negligence even though the doctor can be held responsible. In Indraprastha Medical Corp Ltd. V. State NCT of Delhi [(2011) 1 Crimes 124], the Delhi High Court observed that the offence of medical criminal negligence cannot be fastened on a hospital since the hospital can neither treat nor operate a patient on its own. Further, the Supreme Court, while quashing criminal cases against doctors, seems to have also held that the hospital cannot be held criminally liable [Malay Kumar Ganguly v. Sukumar Mukherjee [(AIR 2010 SC 1162)].

CONCLUSION

Since the various specialised fora established under the CPA are in the general nature of quasi-judicial bodies, aggrieved persons can personally argue their cases without the involvement of lawyers. Further, the court filing fees for an action in a consumer forum is rather minimal (may not exceed USD 150). This means that costs of pursuing an action under the CPA can be fairly minimal.

Normal court procedure rules typically also do not apply to CPA proceedings. Considering that the usual time period to adjudicate cases in regular Indian courts can extend to 3 – 5 years, actions under the CPA are known to conclude within a year.

Hence, the CPA has been a fairly successful law in dealing with cases relating to ‘deficiency in service’ including medical malpractice cases. The only concern is that Indian courts have been reluctant to award punitive or exemplary damages. The approach that Indian courts may adopt on the concept of loss of future earnings especially while dealing with cases involving foreigners (where the earnings may be much more compared to Indians in similar work profiles) is also an area of concern.

Suhas Srinivasiah is a Partner and Arjun Krishnamoorthy is an Associate at the Bangalore office of Kochhar & Co., a leading law firm in India. They can be reached at suhas.srinivasiah@bgl.kochhar.com and arjun.krishnamoorthy@bgl.kochhar.com.

 

 

By Suhas Srinivasiah and Arjun Krishnamoorthy

Medical Devices: Indian Regulatory Regime And Way Forward

Background

Reflecting the Indian economy’s globally feted growth in recent years, its healthcare industry and market for medical devices have witnessed a significant upswing. Some estimates suggest that the Indian healthcare industry may grow to around USD 238.76 billion by 2020. The Indian medical technology industry (covering devices as well as software, re-agents etc. but excluding medicines) has been estimated to reach around USD 5 billion in 2012 with an annual growth of up to 15% (as reported by Confederation of Indian Industry and Deloitte in 2010 in “Medical Technology in India – Riding the growth curve”).

The Indian healthcare system has made significant strides since India’s independence in 1947, particularly in addressing life expectancy, infant mortality rate and containment/eradication of previously virulent diseases. India is globally the third largest producer (by volume) of pharmaceutical drugs (as noted on the official website of the Indian Government’s Department of Pharmaceuticals) and already attracts sizeable numbers of “medical tourists” from Europe and North America due to the availability of world class doctors and facilities at relatively low cost. However, paradoxically, access to quality healthcare in India remains very limited for the general public, particularly outside its large cities and for the economically disadvantaged. In this context, the Indian government’s healthcare policies and the regulatory framework governing the manufacture and sale of medical devices assumes importance. This article discusses certain key elements of the current legal and regulatory framework as well as proposed legislative and policy initiatives.

Existing Regime

The regulation of medical devices in India emerged rather slowly over the last few decades. The primary law dealing with medical devices is the Drugs and Cosmetics Act, 1940 and the accompanying Drugs and Cosmetics Rules, 1945 (collectively, “Drugs Act”).

While the Drugs Act is principally a statute dealing with pharmaceutical/medicinal formulations, in 1983, the definition of ‘drug’ under the Drugs Act was expanded to include devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings. The specific devices covered by the Drugs Act are notified by the Indian Government. The Drugs Act covers a product’s supply chain from manufacturing to testing, distribution and sale, including, inter alia, registration of the manufacturing premises (in India or elsewhere), import license, sale and distribution license, clinical trial requirements, compliance with labeling and manufacturing standards and requirements.

The (very limited) initial list of regulated devices has been expanded over the years to include about thirty items including (i) In–vitro diagnostic devices for HIV, (ii) Cardiac Stents and Orthopedic Stents, (iii) Catheters, (iv) Intra Ocular Lenses, (v) Bone Cement, (vi) Heart Valves and (vii) Internal Prosthetic Replacements.

Evidently, the list still remains quite small, leaving out a multitude of medical devices, including commonly marketed items like gluco-meters used in homes as well as hospitals for checking blood sugar levels, and high-value medical devices like pace-makers. Such devices are not specifically within the scope of the Drugs Act and appear to fall into a grey area (as opposed to the detailed regulations for such devices in certain jurisdictions).

A review of the Drugs Act also reveals that drugs and pharmaceuticals are regulated by provisions aimed at addressing public health and safety concerns. These include provisions that deal with the adulteration of drugs and spurious drugs, but would not cover devices. As a result, important public health and safety aspects of medical devices remain largely unaddressed. So, while the Drugs and Cosmetics Rules, 1945 contain a few schedules dedicated to medical devices (including Schedule M-III relating to requirements of factory premises for medical devices and Schedule R-1 relating to quality specifications of specified devices), they are inadequate in dealing with the wide variety of medical devices being marketed in a fast growing sector.

Another feature of India’s regulation of drugs/medical devices is that it is divided between authorities under (A) the central government of India (“GOI”) and (B) the various State governments (India currently comprises 28 States). This arises from the federal system in India, as reflected in India’s Constitution (which contains 3 lists demarcating matters to be legislated and implemented by GOI and the State governments). “Drugs” features on the “Concurrent List”, i.e., matters on which both the GOI and State governments have competence. Interestingly, since “Public health and sanitation; hospitals and dispensaries” is listed under the “State List”, healthcare is primarily a matter under the State governments.

Broadly, the regulatory machinery consists of the Central Drugs Standard Control Organization (“CDSCO”), under the Drugs Controller General of India (“DCGI”), Ministry of Health and Family Welfare, GOI. This is the central regulatory agency, which works in conjunction with the State Drug Control Organizations to administer the provisions of the Drugs Act. The Drugs and Technical Advisory Board (“DTAB”) is another nodal agency, set up under the provisions of the Drugs Act to advise the GOI and State governments regarding technical matters relating to the Drugs Act. Further, the Ministry of Health and Family Welfare has established numerous Medical Device Advisory Committees (“MDACs”) dealing with various categories of medical devices (e.g., reproductive & urology devices, ophthalmic devices, etc.). Their primary objective is to advise and assist the DCGI in reviewing applications for new medical devices covered under the Drugs Act, and clinical trials regarding the same. Additionally, the MDACs also have the power to identify devices that need to be regulated/notified by the GOI and prepare guidelines for research and development of new medical devices relevant to India.

There is a further division of responsibilities within this regulatory machinery. The regulation of manufacture, sale and distribution of drugs and regulated devices is primarily the concern of the State authorities while the central agencies (primarily CDSCO and DGCI) are responsible for approval of new drugs, clinical trials, laying down the standards, control over the quality of imported drugs and regulated devices, coordination of the activities of State authorities, etc.

The co-existence of multiple regulatory agencies makes the tracking and understanding of regulatory landscape and developments a cumbersome and daunting task. Added to this, the notification based approach has made the development of regulation very ad-hoc. Often industry players need to reach out to the regulator(s) to seek clarifications. Such a situation gives rise to uncertainty for manufacturers and distributors of most types of medical devices and also compromises protection of public safety and health. This certainly does not bode well for the medical devices market (that is poised to grow exponentially) and customers/users. Unwittingly, this splitting of powers between the GOI and State governments has also created some challenges in the effective regulation of medical devices since any centralized dedicated regulation of medical devices can easily upset this delicate balancing of responsibilities.

That there is a great need for comprehensive regulation of medical devices in India is not in question. As has been noted by Association of Indian Medical Device Industry (“AIMED”), medical devices form an entirely different category as opposed to medicines. In our view, attempting to regulate them through a legislation originally drafted in respect of medical drugs/pharmaceuticals will inevitably be a difficult exercise, given the varied nature of medical devices and the fact that an entirely different set of quality/safety standards would apply to them (as opposed to drugs). In recognition of this need, several efforts have been made to address the situation.

Key Efforts

Certain amendments to the Drugs Act were proposed by way of the Drugs and Cosmetics (Amendment) Bill 2007 (“2007 Amendment Bill”). It includes a proposal to amend the definition of ‘drug’ in order to expand its scope and include various types of medical devices, including any “medical device, medicated device, instrument, apparatus, appliance, material, software necessary for their application, intended for internal or external use in human beings or animals, whether used alone or in combination, as may be specified from time to time by the Central Government …for the purpose of diagnosis, prevention, monitoring, treatment or mitigation of any disease or disorder; diagnosis, monitoring, treatment, alleviation of or compensation for, any injury or handicap; investigation, replacement or modification of anatomy or physiology; or control of conception, and which does not achieve its intended action primarily by any pharmacological or immunological or metabolical process…” While this proposed definition of ‘drug’ aims to cover a broad spectrum of medical devices generally, it falls short of being a significant step forward as it continues to depend on the specific notification of such devices.

Another proposal in the 2007 Amendment Bill is to replace one of the central regulatory bodies, i.e. the DTAB with another agency, the Central Drugs Authority, to advise the GOI and State governments on matters relating to both allopathic and Indian systems of medicine. DTAB currently advises the government on technical matters relating to the Drugs Act, which includes medical devices; however, there is a lack of clarity on how a substitute nodal body such as the proposed Central Drugs Authority would impact or even address some ongoing challenges and issues in relation to the regulation of medical devices.

An overview of the proposed amendments vide the 2007 Amendment Bill, currently pending in the Indian Parliament, shows that these amendments would not be a significant change in direction from the substantive approach to medical devices in the current Drugs Act. The root issues as have been noted by legal commentators and industry, i.e., the problems inherent to using a legislation originally meant for dugs/pharmaceuticals to regulate medical devices, would remain unaddressed.

A more meaningful effort is the draft Medical Devices Regulation Bill, 2006 (“MDR Bill”), proposed by the Department of Science & Technology, GOI, as a consolidated and comprehensive set of regulations specific to medical devices. In contrast to the regime under the Drugs Act, the MDR Bill is intended as a comprehensive and dedicated regulation of medical devices with special focus on public health and safety aspects. The MDR Bill seeks the establishment of a national level regulator aimed at establishing and maintaining a national system of controls for the quality and safety of medical devices. It covers important aspects right from design, standards and manufacturing to testing, packaging, labeling, import, sale, use, and disposal requirements. Importantly, the definition of a ‘medical device’ in the MDR Bill is in line with internationally accepted norms. The complexity of and wide variety of medical devices is recognized and the classification of devices (and regulation) is according to the level of risk associated with them. The approach is to put in place a principle based substantive law rather than mere procedure and license based regulation. This proposal continues to languish due to objections by various States to its provisions, including a perceived dilution of the powers of State regulatory agencies.

Another effort for a comprehensive regulation has been made by the DTAB, which formulated a revised set of guidelines intended to replace and expand the existing Schedule M-III under the Drugs and Cosmetics Rules, 1945. The proposed Schedule M-III proposes regulations for inspection and monitoring of medical devices that in some respects even betters the standard proposed by the MDR Bill, e.g., it provides explicit provisions allowing for the withdrawal of devices that may compromise the health and/or safety of patients or users even after it is installed, maintained and used as per prescribed regulations). It also expands the scope of the definition of ‘drug’ under the Drugs Act by providing broader criteria by which various types medical devices will be deemed to be included within the definition of ‘drugs’ under the Drugs Act. Further, like in the MDR Bill, this proposed schedule also seeks to classify medical devices according to risk levels associated with the use of such devices (e.g.: thermometers would be classified as low risk devices while heart-valves would be ‘high-risk’ devices) – the monitoring and regulatory requirements for medical devices would be calibrated accordingly.

However, while the proposed Schedule M-III was formulated in 2009, it seems to have stagnated. An expert committee was set up in 2009 to review, inter alia, the proposed Schedule M-III and recommend a suitable course of action in relation to the regulation of medical devices but could not take it further – the AIMED and other industry players have made a number of submissions to the DTAB in this regard but there has been little discernible progress. Also, the issue with regulating medical devices through the Drugs Act is not addressed as this proposal seeks to use the existing statutory framework. To our mind, this would not address the fundamental gap in the present system of governing medical devices as ‘deemed’ drugs and pharmaceutical formulations. Therefore, the case for having a comprehensive and full-fledged statute to provide governance and regulation of medical devices in India remains strong.

Unfortunately, any major step forward presents difficult challenges. On the one hand, there is a clear need for a focused and dedicated legislation for regulating medical devices in India, and on the other hand, the creation of a centralized regulatory framework causes a perceived dilution in the separate powers of the GOI and State governments.

There is a great need for policy makers and law makers to step up the efforts to meaningfully set out regulations for medical devices in India. Given the interest and media coverage that this issue has received recently, it is hoped that the concerned powers will make a sustained effort to resolve the difficult issues (including the particular challenge of consensus building among the States and GOI) and pass a dedicated law through the Parliament.

Debashish Sankhari is a Partner in the M&A practice at AZB & Partners and has experience in corporate/advisory and commercial transactions in a broad range of sectors. Shuchi Sinha is a Senior Associate working in the M&A and debt finance practice at AZB & Partners, and has advised clients on investments/financing for various industries including pharmaceuticals, healthcare diagnostics and medical services.

 

 

By Debashish Sankhari and Shuchi Sinha

Case Notes: Madras High Court Rules That Foreign Lawyers May “Fly-In and Fly-Out” To Provide Advice on Foreign Law to Indian Clients

Madras High Court Rules That Foreign Lawyers May “Fly-In and Fly-Out” To Provide Advice on Foreign Law to Indian Clients

On February 21, 2012 the Madras High Court in A.K Balaji v. Govt. of India [2012] 18 taxmann.com 283 (Madras) observed that foreign law firms/lawyers may visit India for a temporary period on a ‘fly in and fly out’ basis to advise their clients in India on foreign law/international legal issues.

In the instant case, most of the respondent law firms were carrying out consultancy/support services in the field of protection and management of intellectual, business, and industrial proprietary rights, carrying out market surveys and market research, and publication of reports and journals without rendering any legal service including advice in the form of opinions.

The question involved was whether foreign firms and foreign lawyers are entitled to practice on the litigation side and non-litigation side in any manner within the territory of India or not. The High Court held that:

  • Foreign law firms or foreign lawyers cannot practice the profession of law in India either on the litigation or non-litigation side, unless they fulfill the requirement of the Advocates Act, 1961 and the Bar Council of India Rules.
  • There is no bar either in the Act or the Rules for the foreign law firms or foreign lawyers to visit India for a temporary period on a ‘fly in and fly out’ basis, for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues.
  • Moreover, with regard to the aim and object of the International Commercial Arbitration introduced in the Arbitration and Conciliation Act, 1996, foreign lawyers cannot be debarred to come to India and conduct arbitration proceedings for disputes arising out of a contract relating to international commercial arbitration.
  • P.O. companies providing wide range of customized and integrated services and functions to its customers like word-processing, secretarial support, transcription services, proofreading services, travel desk support services, etc. do not come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules. However, in the event of any complaint made against these B.P.O. Companies violating the provisions of the Act, the Bar Council of India may take appropriate action against such erring companies.

Therefore in the light of the scheme of the Act if a lawyer from a foreign law firm visits India to advice his client on matters relating to the law which is applicable to their country, for which purpose he ‘flies in and flies out’ of India, there could not be a bar for such services rendered by such foreign law firm/foreign lawyer.

The case presented interesting issues on whether foreign lawyers can come to India for the purpose of offering legal advice to their clients here on foreign law and whether any provision of law prohibits practice of foreign law in India.

Mr. Aseem Chawla is a Partner, and Ms. Surabhi Singhi is an Associate, Amarchand & Mangaldas & Suresh A. Shroff & Co., based out of Delhi, India. Mr. Chawla leads the tax practice group of the firm and can be contacted at aseem.chawla@amarchand.com. Ms. Singhi is an Associate with the tax practice group of the firm and can be contacted at surabhi.singhi@amarchand.com.

Medical Tourism And India

Government healthcare programs are bankrupting Federal and State governments in the United States. To add to the pressure, employer-provided health insurance takes an ever-greater share of corporate income. The Federal government’s response has been to require individual health insurance coverage and start creating a set of government bureaucracies that are intended to control costs.

Part of the reason for this is a complex relationship between subsidized healthcare; subsequent high public demand for the subsidized care; a consequent shortage of healthcare resources and therefore, ever-higher prices for relatively scarce healthcare. An increasingly popular way to escape from the system is to leave the United States and receive healthcare outside the U.S., a phenomenon often known as “medical tourism.”

Medical tourism is of course an old phenomenon. Wealthy patients for centuries have gone to areas well-known for cures, such as spas and hot springs, including the famous town of Spa in Germany, or Bath in England. And with the advent of air travel, wealthy patients for decades have traveled transcontinentally for medical care. Patients in countries with government health systems have long traveled internationally for better care or to avoid the lengthy wait-times to receive government healthcare. The new medical tourism phenomenon in the U.S. is that patients are bypassing good care nearby to get good but more economical care overseas. Until recently, the phenomenon in the United States has focused on Latin America, as well as East and South Asia, primarily due to much lower cost structures and an increasingly sophisticated healthcare infrastructure. India in particular, along with Thailand, has been at the forefront of providing a high level of care for complex surgeries, such as cardiac surgery, with lengthy rehabilitation schedules. From the perspective of developing U.S. markets, both of these destinations have a high level of medical expertise, but suffer from unfamiliarity to patients and a lengthy travel time, as we shall see.

Medical tourism has heretofore essentially been limited to patients paying out of their own pockets. Part of the reason is programmatic: the Federal Medicare program will not pay for healthcare services outside the U.S. except in certain very limited circumstances. The private market is very different: theoretically, there are few limits on large private employers and insurers providing for or encouraging medical tourism, but this has not been the norm. Partly, the hesitancy to embrace medical tourism is driven by patients: patients seek care close to their homes, so they prefer care in the U.S. And there is no economic reason to go abroad for less costly primary care; therefore, routine and primary care is usually local. Specialist care, for which travel is undertaken, is usually care from a physician or medical center with cutting-edge expertise. This care would also usually be sought in the U.S. However, there are certain complicated procedures, such as heart bypasses, hip and knee replacements, or other major surgeries, which have established protocols (not needing one-of-a-kind specialists) and which are expensive in both hospital and post-acute recovery expenses. There are also procedures, or drugs or devices that have not been approved in the U.S. by regulators, and so are only available overseas. These types of healthcare services have been the services most likely to be successfully offered through medical tourism.

These needs for less expensive care or care not otherwise available, have met with an initial response: large employers are increasingly considering offering medical tourism to their employees as a healthcare option. It is being considered in some cases as a serious potential solution to increasing healthcare costs. However, much care must be taken in the presentation of medical tourism options. Rather than requiring overseas care (which could generate costly negative blowback from employees), it is possible employers will offer medical tourism as an option, whereby employees could be told that they could (i) get an operation locally with a significant co-pay or (ii) travel overseas to receive the operation with no, or much smaller, co-pay. Smaller co-pays (with a difference of a few hundred or even a thousand dollars) may not incentivize patients to go overseas for care. However, with respect to an operation costing, say, $200,000, employers are looking at requiring a significant patient co-pay for domestic care (which could be up to tens of thousands of dollars) versus providing free overseas care. A serious incentive such as this may lead to an embrace by employees of the overseas option.

Of course, one major issue for U.S. patients will be quality of care (or perception of quality). Rightly or wrongly, U.S. patients will be concerned about quality of overseas care vis a vis the U.S. system. In this light, getting Joint Commission International (“JCI”) accreditation can be of great benefit. JCI is an affiliate of the Joint Commission, a widely respected U.S.-based accreditation organization which provides surveys and accreditation to healthcare providers in the U.S. It is not simply a matter of patient comfort, because few patients will understand the full import of gaining such accreditation. The greater impact will be on hospitals, doctors and other U.S. healthcare actors who may refer or be consulted by patients for their opinion, and who will more likely understand what Joint Commission accreditation means. Accreditation (and preparing for it) also has a salutary impact on an organization’s performance, and helps concretize the standards that are expected, and will assist with successful implementation of a medical tourism program.

Another issue is providing U.S.-licensed doctors.  There are examples of U.S.-licensed doctors practicing overseas, but not a great number, because the financial rewards of practicing in the U.S. are significant. There are many successful operations without U.S.-licensed doctors as the care directors, but the lack of U.S.-licensed doctors may continue to be a significant issue with the expansion of medical tourism among U.S. patients, who tend to trust U.S. doctors. The resistance of U.S. doctors to practicing overseas is also sometimes a question of distance: this is a potential advantage that the Caribbean and Latin American sites have over Indian and other Asian sites, due to their geographical proximity to the U.S.   India does offer significant advantages over many competing sites, but operators who want to “move to the next level” have to take on this issue of providing U.S.-licensed (or U.S.-trained) doctors to American patients.

One major legal issue that is too little addressed is legal liability. The U.S. is an infamously litigious society, and many persons and organizations get involved with facilitating medical tourism without understanding what legal risks it entails.   For example, some U.S. persons have acted as healthcare “travel agents” for patients and have subsequently been sued in U.S. court when the procedure outside the U.S. went wrong. Facilitators in the U.S. must have a written understanding with U.S. patients. This agreement should cover a number of issues, but must provide a patient acknowledgement that the facilitator is not responsible in any way for the success or non-success of the medical services, and is not liable for any outcome, including injury or death. The facilitator’s role must be spelled out clearly and limited.

The same should be true of the non-U.S. providers. They should be clear in providing information on what is being offered and guaranteed (or not). A standard packet of forms regarding health evaluations, practices, outcomes and medical records should be prepared ahead of time with counsel. The relationship with the U.S. medical tourism facilitator should also be clearly spelled out.

The legal climate in U.S. healthcare is changing in unexpected ways due to the passage of the 2010 health bill. The Patient Protection and Affordable Care Act (“PPACA”), also known as “Obama Care,” would seem to have no direct impact on medical tourism. However, the indirect impact of PPACA could be profound. PPACA seeks to control costs through a super-bureaucracy which will directly control U.S. healthcare costs through (presumably) cutting coverage of certain products and services and lowering provider reimbursement, or a combination of both. If this new bureaucracy succeeds where all others have failed, U.S. healthcare costs will go down and the need for medical tourism will fade. Even if the super-bureaucracy fails, and the incentives for medical tourism remain in place, greater governmental control over employer health insurance might easily lead to U.S. healthcare providers lobbying the government to require a “Buy American” mandate into health insurance or create more subtle disincentives, such as: disallowing travel expenses; creating minimum and maximum provider charges; or disallowing per diem post-acute care recovery payments, for example. As the government gets more involved in directing healthcare, it will naturally, as it already does in Medicare, favor domestic providers over overseas providers in ways large and small. Of course, this is all speculative; no such regulations have been announced or put in force, but it is worth considering this issue and remaining aware of it.

India is an interesting case for medical tourism. With a large English-speaking healthcare workforce, it is a natural choice for U.S.-directed medical tourism. However, as noted, long air flights from the U.S. and a relative shortage of U.S.-certified doctors have created issues for many potential patients. And of course, an increasingly wealthy India means that the cost differential between India and the U.S. is more or less constantly being whittled away.

India has been sought out particularly for high-cost surgeries, such as heart bypasses, which have lengthy rehabilitation periods. The trend has grown as Indian healthcare has continued to receive good press and word-of-mouth recommendations from returning patients. In addition, the rising prestige of Indian hospitals, physicians and medical staff and the greater profile of Indian medical products and pharmaceutical companies no doubt also has had a role in increasing the comfort level of U.S. patients with receiving care in India.

Although increasing wealth in India and an increasing domestic demand for sophisticated medical care will no doubt raise the cost of healthcare in India over time, such is the pace of U.S. medical inflation, that India will not soon catch the U.S. in healthcare costs. And in an increasingly globalized market, even services that seem naturally local, such as healthcare, will be provided in the global marketplace.   By paying attention to the fundamental issues of quality, quality perceptions, accreditation, legal structure and the evolving legal landscape in the U.S., Indian healthcare providers have a bright future in succeeding in this new marketplace.

Eric Hargan is a Shareholder in Greenberg Traurig’s healthcare department, based in Chicago, Illinois. He formerly served in the position of Deputy Secretary of the U.S. Department of Health and Human Services in Washington, D.C. and as a U.S. representative to the World Health Organization. He may be reached at hargane@gtlaw.com; phone (312) 208-7089.

 

 

by Eric Hargan


 

 

 

Must Knows For Engaging Contract Labor In India

To meet their staffing needs in India, many businesses, both domestic and foreign, engage contract labor for the scalability and flexibility it provides in managing human resource and head count. This approach raises several legal compliance issues that must be dealt with both up-front and on an ongoing basis. This article provides a road map for managing the legal and regulatory risks of engaging contract labor.

  1. What the Law Permits

In a nutshell, the Contract Labour (Regulation & Abolition) Act, 1970 (the “Act”) permits companies and establishments (the “Employer(s)”) in the manufacturing and services sectors to engage contract labor through contractors for performing tasks that do not form part of the “core” operations. Core operations are those activities for which a company or establishment has primarily been established. The Act allows the Government to prohibit Employers from employing contract labor in any of its core process or operations. The Government, prior to issuing a prohibitory notification for engaging contract labor in any process evaluates whether –

  • the process or operation is incidental or necessary for the Employer;
  • the work performed by contract labor is permanent in nature;
  • such process or work is ordinarily performed by regular employees of other similar Employers; and
  • sufficient number of whole-time employees can be deployed to perform the work.

By engaging contract labor in the incidental activities, Employers can concentrate on developing their core competencies and non-core activities are performed by contract labor whose management is in the hands of contractors who employ and control them.

  1. Applicability of the Act

The Act is applicable to every Employer or contractor who employs or has employed 20 or more contract laborers on any day during the previous twelve months. The Employer is treated as a single unit without reference to the nature of work that is being executed by the contract labor. The workmen include any person who is employed by a contractor to work in a company or establishment to perform any skilled, semi-skilled or unskilled manual supervisory, technical or clerical work.

For example, if a Company X,an IT company, has executed a contract to provide certain services (say call center or development of certain software) to its client for which Company X requires about 40-50 people to complete the project. The term of the contract is 1 year.  However, Company X already has more than 300 employees and does not want to increase its head counts by engaging 40-50 people for performing the contract. It decides to outsource the entire contract to another service provider whose employees’ will provide the services at the site of Company X while Company X will provide the entire infrastructure required to perform the said services. Such arrangements / contracts come within the purview of the Act. However, people employed in managerial or administrative positions are outside the ambit of the Act as they work on contracts directly executed between them and their employer.

The Act is not applicable if the work performed by a contract labor is of a sporadic nature. It is the Government that decides if the work is of a casual or intermittent nature and its decision regarding the same is final. Basically, any work performed for more than 120 days in a year in a company or establishment is not considered as work of an intermittent nature. Consequently, contract labor is usually engaged by the Employers for performing support services such as security, catering, courier, construction and maintenance, gardening, house keeping, transport etc.

  1. Compliances under the Act

The Act requires both the “principal employer” and the contractor to fulfill their respective statutory obligations. Principal employer is the one who employs contract labor through a contractor. “Contractor” in relation to an Employer means a person who – (a) undertakes to perform a job for the Employer through contract labor other than mere supply of goods or articles of manufacture; or (b) supplies contract labor for any work of the Employer & includes a sub-contractor.

In case of a factory, any one of the “owner”, the “occupier” or the “manager” (as per the Factories Act, 1948) is considered a principal employer whereas, in case of a company or establishment, the person who is in control and supervision of such company or establishment is considered to be the principal employer.

As per the Act – (a) the Employer must be registered with the authorities; and (b) the contractor must have a valid license from the authorities prior to engaging contract labor.

In the case of Workmen of Best & Crompton Industries Ltd. v. Best & Crompton Industries Ltd., the Madras High Court held that the principal employer must engage contract labor through a contractor who has a valid license, because an invalid license of a contractor would imply direct employment of contract labor by the principal employer. The license issued by the authorities is job specific, and cannot be transferred for any other job and is indicative of the number of contract laborers a contractor can employ for a given job.

The contractor is responsible for providing all statutory benefits to contract labor and if he fails, the obligation falls on the principal employer.   The Supreme Court in People’s Union for Democratic Rights v. Union of India held that if the contractor fails to fulfill its duties under the Act then the principal employer is under an obligation to provide all amenities and benefits prescribed under the law to contract labor deployed at its establishment. The principal employer must witness disbursement of wages to the contract labor by the contractor (who is essentially the employer of the contract labor). If the principal employer steps in on behalf of the contractor to provide facilities and benefits to the contract labor then such a principal employer is entitled to recover the money spent, from the contractor. Non-compliance with provisions of the Act can lead to imposition of monetary & penal sanctions.

  1. Guidelines for Engaging Contract Labor

While engaging contract labor, the Employers must execute contracts with the contractors and such agreements must clearly define the terms of engagement of the contract labor.

The Employer must ensure that it does not appoint one of its own employees’ as a contractor through whom it engages contract labor. In case of a dispute between contract labor and principal employer, the courts may lift the veil to ascertain the intent of the management and/or check genuineness of such an agreement. If the principal employer is employing and controlling the contract labor through its own employee posing as a contractor then the principal employer is, without actually increasing its head count, controlling the contract labor. In the case of Indian Petrochemicals Corporation Limited v. Shramik Sena, the Supreme Court held that such contracts are sham and bogus and are liable to be set aside.

The Supreme Court in Haldia Refinery Canteen Employees Union & Others vs. Indian Oil Corporation Limited laid down certain guidelines for engaging contract labor:

  • Principal employer must not interfere with the contractor for engaging contract labor. Contractor must have free hand to engage its employees;
  • Wages should be disbursed by the contractor, principal employer must not have any direct role to play except deploy its representative in whose presence salaries are distributed by the contractor to the contract labor (as required under the Act);
  • Contractor is liable to pay all statutory benefits such as provident fund contributions, leave salary, medical benefits, and observe statutory working hours for its employees. Principal employer should avoid managing the contract labor;
  • Contractor is responsible for proper maintenance of registers, records and accounts for compliance with statutory provisions/obligations;
  • Contractor should maintain records of payments of wages etc. and for deposit of provident fund contributions with authorities;
  • Contractor is liable to defend/indemnify the principal employer from any liability or penalty which may be imposed by State/Government authorities for any violation by the contractor of such laws, regulations and also against all claims, suits or proceedings that may be brought against the principal employer arising under or incidental to or by reason of the work provided/assigned under the contract brought by the employees of the contractor, third party or Government authorities.

The Supreme Court in the case of Hindalco Industries Ltd. vs. Association of Engineering Workers observed that – (a) the workmen were employed for long years and despite a change of contractors the same workers continued to be employed at the establishment and; (b) there was evidence on record to establish the ultimate control of management on such contract employees. Under such circumstances, the Court would be entitled to pierce the veil and arrive at a finding that the justification relating to appointment of a contractor is sham or nominal and in effect and substance there exists a direct relationship of employer and employee between the principal employer and the workmen.

The principal employer has a right to assess the abilities and skills of the workers employed by the contractor to ensure the quality of service provided under the contract, without actually managing or directing such contract labor. While engaging contract labor, the principal employer must abstain from – (a) controlling their appointment and terms of appointment; (b) controlling them directly or indirectly; (c) taking disciplinary action; (d) supervising their work directly; and (e) dismissing or removing contractor’s employees from service. The principal employer must only exercise a supervisory role to ensure that well qualified & capable people render the required services properly. The principal employer should communicate with the contractor only.

5.         Absorption of Contract Labor

As stated above, the Act empowers the Government to prohibit employment of contract labor in any process, operation or other work in any company or establishment. Once the appropriate Government issues a prohibitory notification banning engagement of contract labor, it will not be possible for an Employer to engage contract labor on that job, process or operation. The Supreme Court in the case of Air India Statutory Corporation v. United Labor Union held the view that if a prohibitory notification has been issued by the Government then contract labor engaged in those prohibited activities would be considered the direct employee of the principal employer and shall acquire a right to automatic absorption into the service of the principal employer.

In a subsequent judgment of Steel Authority of India Limited v. National Union Water Front Workers (“SAIL Judgment”), Supreme Court set aside the Air India judgment. In the SAIL judgment, the Supreme Court held that prohibition notification issued by the Government does not mean automatic absorption of contract labor in a company or establishment. It is essential that the court must consider the terms of a contract to establish if the contract under which the labor is appointed for work is a genuine contract or is a mere ruse/camouflage to evade compliance with the provisions of the Act. If it is found that the contract is a camouflage then contract labor must be treated as an employee of the principal employer who will have to regularize such contract labor. However, if the contract is genuine then the principal employer at its own discretion can employ contract labor as a regular employee by giving them preference over others. But under no circumstances, is the principal employer under any obligation to absorb contract labor on its rolls if employment of contract labor in certain activities is prohibited by the Government authorities.

Consequently, certain ancillary jobs in a company or establishment can be performed by the contract labor engaged through contractors provided the Government has not banned their employment on those jobs and they are given all their statutory benefits. Although contract labor is an effective way for an Employer to have access to additional human resource without increasing its head count, it is pertinent to understand the finer nuances of engaging contract labor and the related law prior to engaging contract labor so as to avoid unwarranted disputes with them.

Sunil Tyagi is a Senior Partner and Namrata Wadhawan a Senior Associate at ZEUS Law Associates. ZEUS is a corporate commercial law firm based in India. One of its areas of specialization is employment law related transactional and litigation work. Sunil and Namrata can be contacted at sunil.tyagi@zeus.firm.in and namrata.wadhawan@zeus.firm.in.

 

 

By Sunil Tyagi & Namrata Wadhawan

 

 

 

 

A Webinar on Medical Devices Exports and Joint Ventures in India

India is one of the largest medical device markets in Asia. This market is expected to grow at 15% a year for the foreseeable future. A growing middle class has led the government to allocate the equivalent of 5% of annual GDP to expand and improve health care in the country. Despite this, it is expected that the greatest demand for medical devices will come from private hospitals and clinics. Currently, 75% of India’s medical device market consists of imports. This webinar will discuss the nuts and bolts of importing medical devices into India, including tax consequences. Panelists will also cover joint ventures for the manufacture of medical devices in India for both the domestic and export market, clinical investigations and quality standards. Topics will include India’s Drugs and Cosmetics Act and Rules, and their implementation by the Central Drugs Standard Control Organization (CDSCO) as the key medical device regulatory organization in India. Specific attention will be given to structuring transactions, the regulatory framework, as well as proposals for creating a comprehensive framework and single regulatory body specifically for medical devices.

Moderator: Bhalinder L. Rikhye, Peltz & Walker, New York

Speakers:

Amy Hariani, Director and Legal Counsel for the U.S.-India Business Council (USIBC), Washington, D.C. Ms. Hariani manages the Life Sciences and Legal and Professional Services portfolios.

Rohan Shah, Managing Partner Economic Laws Practice (ELP), Mumbai. Mr Shah is well known for his expertise on advisory, policy and controversial issues related to domestic and international taxation in India.

Third speaker to be announced

There will be a 15 minute question and answer period

 

by

ABA Section of International Law

Your Gateway to International Practice

Conundrum Of Medical Devices Approval Process In India

The development of medical devices has extended the ability of physicians to diagnose and treat diseases, and has made great contributions to health by improving the quality of life of patients. Generally, medical devices would include any instrument, apparatus, machine, appliance, implant, in vitro reagent or calibrator, software, material or other similar or related article. However, in India, the medical devices employed in internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals are considered to be “drugs” as notified by the central government in its official gazette after consultation with the Drugs Technical Advisory Board. Those medical devices not notified as drugs only require an import or manufacturing license and no quality check system exist for them.

Regulatory framework

At the moment, in India there is no single comprehensive specific law regulating medical devices. The import, manufacturing, sale and distribution of medical devices are regulated under the Drugs and Cosmetics Act, 1940 (“India Act”), the Drugs and Cosmetics Rules, 1945 (“Rules”); and the Central Drugs Standard Control Organization (“CDSCO”). The Ministry of Health and Family Welfare (“Ministry”) is the principal regulator. A draft Bill on “Regulation of Medical Devices” (“the Bill”) has been pending since 2006. Once implemented, it will, perhaps, streamline the medical devices sector. Until such time, one has to refer to multifarious regulations.

With effect from March 1, 2006, the Ministry approved a set of procedures follow for the import as well as manufacture of medical devices in India. The Drugs Technical Advisory Board, which provides technical guidance to CDSCO, proposed certain changes in the Rules, which among others provides a categorization of medical devices into four classes. This classification is based on the risk level, intended use and on adverse effect of the devices on the human body based on the potential risks associated with the technical design and manufacture of these devices. The classes of devices are: (i) Class A: Low risk devices and equipment such as thermometers and tongue depressors; (ii) Class B: Low to moderate risk devices including hypodermic needles and suction equipment; (iii) Class C: Moderate to high risk equipment like lung ventilators and bone fixation plates; and (iv) Class D: High risk devices such as heart valves and implantable defibrillators. The regulatory control becomes stringent with each progressive class and the conformity assessments are proportionate to device classification.

Import of medical devices

Presently, the import of medical devices is largely unregulated and medical devices can be freely imported into India. The purchaser (whether it is a government hospital, a private hospital or a doctor) evaluates the quality of the product being purchased. Normally, the U.S. Food and Drug Authority (“FDA”) and the European Conformite Europeenne (“CE”) approved products are preferred because of their better quality and performance. It is necessary to follow the procedures for registering and obtaining a license as laid down under the Rules. Import licenses are conditional and granted for a period of three years. Breach of any of the stipulated conditions may lead to the cancellation of the license.

To be registered in India, the imported device must be approved for sale in the manufacturer’s country of origin. If the device has already received approval from an agency abroad, such as, the U.S. FDA, evidence of such approval must be provided along with a copy of quality standard ISO/EN certification which assesses the quality and risk of the devices manufacturing facility. Medical devices with prior approval from any of the recognized regulatory authorities, like FDA and CE are subjected to an abridged evaluation in India.

If a device is not approved for marketing in the country of origin, the importer has to submit additional evidence such as reports of clinical trials, details of sales, certificates of satisfactory use from medical specialists about the use of the device and details of product complaints, if any. If a device incorporates a medicinal product, which is likely to act upon the body in conjunction with the device, it is pertinent to provide relevant data on the safety, quality, and usefulness of the medicinal substance used along with data on compatibility with medicinal products, clinical data and published articles, if any. 

The manufacturer must also have complied with product standards and home country quality control requirements. The manufacturer of the devices, the importer or his agent must file an application to obtain a registration certificate with respect to the premises where the devices are manufactured and with regard to the devices. The product information and the undertakings with respect to product standards, safety and effectiveness requirements and quality systems in the country of origin are necessary to be furnished. Crucially, a brief description of the device, its intended use and method of use, medicals specialty in which the device is used, the qualitative and quantitative particulars of the constituents, device master file with details of the manufacturing process/flow chart and the component/material used and risk assessment as per ISO 14971 are necessary to be provided. Once a medical device reaches the market in India, the manufacturer has to adhere to requirements of post-marketing surveillance (“PMS”) norms to systematically monitor the performance of the device. PMS involves procedures for maintenance of records, complaint handling, adverse incident reporting and procedures for product recall.

Manufacture of medical devices

The manufacture of medical devices in India requires a license from the government. An application for the license is made with a brief description of the manufacturing process, details of the manufacturing standards and “best practices” \ that will be followed by the company, as well as product evaluation, , standards, and procedures for testing the device. The Rules prescribed in Schedule M-III list mandatory “good manufacturing practices” that manufacturing companies must follow. The law provides that any manufacturing can be done under the direction and supervision of only a whole-time employee of the manufacturer and who is qualified to do so. India has several stringent industrial and labor laws that make the occupier of the manufacturing plant, responsible for any breach in compliance. The occupier is generally the managing director of the company that runs the manufacturing unit or a director on the board of directors and can be fined up to INR 0.2 million or imprisoned up to two years for any non compliance.

As proposed under the Bill, the regulatory authority sets up an expert committee to consider proposals and evaluate medical devices that do not have any benchmark certification. The committee after completing its assessment forwards its opinion regarding suitability of the device to the competent licensing authority which can grant of permission for the device to be launched in the market. The licensing authority after joint inspection and verification forwards the license to Central License Approving Authority (“CLAA “) for approval. The license is finally issued in form 28 of the Rules after due approval of CLAA. The stockist and retail sellers of medical devices are also required to obtain sales licenses from the respective state licensing authorities for medical devices.

Clinical investigations

At present, clinical trial studies are not regulated in India. However, a set of good clinical practices guidelines laid down by the CDSCO govern clinical trials and specify the responsibilities, inter alia, of sponsors, investigators, and ethics committees. In 2010, CDSCO released a guidance document on the requirements for conducting clinical trials of medical devices in India (“Guidance”). It is necessary to file an application with the CDSCO before conducting the study and the application should indicate the precise intent of the application (e.g. whether the application is for a feasibility study or a safety and efficacy study, or a post market study). The entity sponsoring the study must also submit a declaration on its letterhead prescribing the extent of delegation of responsibilities to an individual who is appointed as the Principle Investigator. It is also necessary to provide the global regulatory status of the device (particularly when 5 Global Harmonization Task Force (“GHTF “) countries i.e. U.S.A., Australia, Japan, Canada and European Union are involved) along with detailed technical data.

Though the document is still non-binding, it provides sufficient procedural information regarding the method to all stakeholders.

Medical devices: Quality standards

According to the Guidance, all medical devices sold in this country should carry the ICAC mark (Indian Conformity Assessment Certificate) to indicate their conformity with the provisions of the schedule of the Guidance to enable them to move freely within the country. CLAA adopts and recognizes quality standard BIS 15575 or its revisions and quality standard ISO 13485 in respect of the specifications to be followed for quality for the manufacturer to demonstrate conformity with the relevant regulatory requirements. Any reference to the harmonized standards includes the monographs of the Indian pharmacopoeia and U.S., EU pharmacopoeia wherever applicable, notably on surgical sutures and on combination of pharmaceutical and devices.

It is necessary that the labels on the packaging material for medical devices comply with the relevant ISO standards. It is also necessary to denote internationally accepted symbols regarding sterilization, single use etc, as per ISO 15223-1:2007. When medical devices are sold in bulk the packaging material of individual devices do not have to bear the date of manufacture, which must appear on the bulk packaging material.

In light of the growing usage of medical devices, stringent regulatory standards are essential to ensure that the devices are tested, safe and with minimum adverse reactions. Standards regarding safety, risk elements, effectiveness, efficiency and performance of the medical devices need to be well established. It will be interesting to see how the regulatory scenario changes if and when the Bill is enacted into law. Apart from the Bill, there are different proposals for regulating India’s medical devices sector by different regulatory bodies, like amending the India Act and Rules proposed by the Ministry. The intergovernmental dispute is a cause for concern and confusion for India’s medical devices industry.

Neeraj Dubey is a principal senior associate and commercial lawyer with PSA Legal Counselors. He heads the Food & Pharma and IPR practice areas of his firm. He may be contacted at n.dubey@psalegal.com.

 

 

By Neeraj Dubey