Life sciences laws in India govern medicines, medical devices, biotechnology and healthcare, safeguarding patients and consumers while ensuring product quality, efficacy and safety. These regulations govern marketing and advertising, intellectual property rights, price and payment, and clinical trial compliance to avoid legal issues and retain public trust.
They present unique legal and business challenges to building or buying pharmaceutical manufacturing facilities, importing specialty ingredients for health and beauty products, selling health foods, supplements and nutraceuticals, and running bioavailability, bioequivalence and nutraceutical clinical trials.
In 2022, Indian healthcare was worth about USD370 billion, with the consulting firm Nexdigm predicting USD610 billion in healthcare revenue by 2026.
The Ministry of Health and Family Welfare (MoHFW) received USD10.76 billion in the 2023–2024 Union Budget. The government is also introducing a USD6 billion credit incentive programme to boost hospital infrastructure.
India also extensively regulates pharmaceutical pricing, marketing, clinical trials, biosimilar approval, import-export of medications and materials, safety and efficacy, and price. These rules enable economical worldwide drug distribution and healthcare advancements for almost 1.45 billion Indians.
POLICY AND REGULATIONS
The 1940 Drugs and Cosmetics Act (D&C Act) regulates India’s life sciences industry, ensuring the quality of medications imported, manufactured, distributed and sold.
The Drugs (Prices Control) Order of 2013 regulates pharmaceutical pricing, whereas the Drugs and Magic Remedies (Objectionable Advertisements) Act of 1954 oversees therapeutic claims.
The 2002 Competition Act governs supplier, manufacturer and stakeholder anti-competition behaviour. The Consumer Protection Act (CPA) prohibits discriminatory commercial practices and product liability for manufacturing flaws. The 1970 Patents Act prohibits ever-greening, while the 1999 Trade Marks Act safeguards trade names.
Environmental statutes require environmental impact evaluations, limit industry expansion, and regulate solid and hazardous waste management.
OPPORTUNITY
Medical devices, digital healthcare and hospital infrastructure intertwine with life sciences. Medical tourism imports are on the rise, bringing USD9 billion to the healthcare industry. The government recently introduced a medical device manufacturing production-linked incentive system (PLI) to boost investment, domestic manufacturing, and minimise the sector’s imports.
Primary, secondary and tertiary hospitals in India are government-supported or privately operated. Private healthcare contributions are expected to increase by 15% annually. Experts expect the healthcare sector to grow by at least 5.75% by 2032, reaching USD155 billion.
Foreign companies have several opportunities in biotechnology and biopharmaceuticals, which are growing rapidly. With more than 800 enterprises, the Indian biotechnology sector is worth USD80 billion globally.
India is a leading contract research, clinical trial and manufacturing hub. Refurbished laboratory and medical instrument vendors have good potential in the medical equipment sector, which needs a lot of money. Advanced medical facilities use these gadgets as auxiliary systems. However, district hospitals and less specialised medical facilities view refurbished laboratory and medical equipment as of greater quality due to their lower cost.
Strict and strong consumer protection holding makers, retailers and providers accountable for defective products and services that harm consumers was upgraded addressing product liability by the CPA of 2019. It replaces former product liability laws including the Indian Contract Act of 1872, the D&C Act of 1945, and the previous CPA of 1986.
Notable changes include a shift towards electronic commerce, stiffer fines for false advertising, and celebrity endorsement limits. Organisations must comply to avoid medical malpractice claims. The insurance coverage that organisations need to maintain will undergo changes.
In response to unregulated medical devices circulating, the Medical Device Rules (MDR) implemented in 2018 empowers the government to issue a “warning” for some medical devices, classifying them as “drugs”. The MoHFW added section IIIA to the MDR requiring online registration of all medical devices with the Drugs Controller General of India by 1 October 2021.
Since the pandemic, digital healthcare and telemedicine have grown rapidly. Smart patient-hospital barrier reduction methods, as well as modern health technologies, are popular. Scholars and stakeholders think telemedicine and AI are promising.
The MoHFW and Niti Aayog, the Indian government’s public policy think tank, recently released telemedicine guidelines. The National Medical Commission (formerly the Medical Council of India) regulates remote consultations by qualified medical practitioners.
RECENT LEGISLATION
In July 2022, the MoHFW introduced the New Medication, Medical Devices and Cosmetics Bill, replacing the Drugs & Cosmetics Act of 1940, governing the surveillance of medical device administration, which includes software, implants and instruments. The classification for these devices is “drugs”. The main goal of this legislation is to improve the safety, efficacy and international benchmarks of medical devices, medications and cosmetics.
On receiving parliamentary approval, the new legislation will establish regulations pertaining to pharmaceuticals, medical apparatus and cosmetics.
In May 2023, India began implementation of the National Medical Device Policy, which aims to:
- Guarantee universal accessibility to superior medical devices;
- Augment domestic manufacturing capabilities to ensure affordability;
- Improve product quality and
international competitiveness; - Foster a healthier lifestyle via extensive device utilisation;
- Facilitate innovation within the sector; and
- Enhance clinical outcomes by means of timely detection and precise treatment.
These simplified regulations stimulate sector growth through investments in infrastructure, research and development, and innovation.
The Medical Device Rules (MDR) govern the clinical investigation, manufacturing, import, sale and distribution of medical devices in the country. The MDR 2017 governed a wide range of implanted device categories. In January 2022, the government issued a directive requiring all medical device manufacturers to acquire ISO 13485 certification and formally register their products with the Central Drugs Standard Control Organisation.
Strict adherence to these standards is required for the production and oversight of medical equipment and invitro diagnostics. Registration of medical devices was previously voluntary. Medical device registration is required for class A and B devices since October 2021, and class C and D devices since September 2022.
In June 2021, the Indian Medical Device Industry Association and Quality Council of India extended the 2016 Indian Certification for Medical Devices Scheme to include the Indian Certification Plus (2021) methodology.
This novel technology examines medical device quality, safety and benefits, helping government agencies uncover counterfeit products and bogus certificates. The revised rules removed reapproval of import and production licences.
Cardiac stent and knee implant prices were restricted by up to 70% in 2017. A 5% ad-valorem health tax was introduced on medical, dental, surgical and veterinary devices in 2020.
The Department of Pharmaceuticals revised India’s Procurement Order 2017 in February 2022 to improve patient access to critical medical technologies that are not produced domestically.
The NPA imposed price caps on six medical products in June 2021. This included oxygen concentrators, blood glucose monitors, blood pressure monitors, pulse oximeters, nebulisers, and digital thermometers. To justify price limits, the NPA used trade margin rationalisation (TMR) by exploiting the price gap between producers and patients.
To increase patient access to affordable and accessible healthcare, the NPA established the TMR policy for medical equipment and drugs in 2018.
The government is reducing trade margins for important medications, including patented ones, to cut costs and boost patient access. This TMR-based project starts with 139 drugs including antibiotics, oncology, and chronic renal disease treatments.
In June 2020, the Department for Promotion of Industry and Internal Trade updated the 2017 Public Procurement Order to favour Indian companies with 50% local content. Government tenders exclude “non-local suppliers” with less than 20% local content.
The Union Budget for 2023–24 allocated an additional 15% for intellectual property, raising the budget from USD38.4 million to USD40.1 million.
TAKEAWAYS
Regulatory policies and laws profoundly and intricately affect the life sciences sector in India. Although conducive to fostering innovation and attracting foreign investment, the implementation of flexible regulations and the ease of doing business strategies can present barriers concerning the accessibility and affordability of pharmaceuticals.
Constantly striving to strike a balance that fosters innovation, guarantees provisions for vital medications, and adheres to international trade commitments is a persistent challenge that policymakers must confront.
In order to remain competitive in the global market for pharmaceuticals, biosimilars and biopharmaceuticals, India must modify its policies to accommodate the ever-changing life sciences landscape and innovation.
This is particularly crucial as the population’s requirements continue to evolve. Determining the trajectory of the life sciences industry in India will require an exact balance between public health policies, innovation regulations, monitoring and protection via intellectual property rights, and government-industry collaboration.
Authors: Manisha Singh and Pankaj Musyuni
First Published By: Law.Asia here