Regulatory Yearly Wrap 2022: Pharmaceuticals in India 

The Government’s attempts to streamline the regulation of medical devices in India have continued in the year 2022. The COVID-19 epidemic has presented the pharmaceutical sector with various difficulties and possibilities during the last 1.5 years. The pandemic has increased demand for essential pharmaceuticals, including HCQ, Paracetamol, Vaccines, TB, Insulin, and cardiac treatments because India produces 60 per cent of the world’s vaccines and is one of the biggest producers of generic drugs. At the same time, the industry has been hindered, and supply chains have been disturbed by the lack of active pharmaceutical components and the decreased demand for non-essential medications.

To ensure that the pharmaceutical sector in the nation is not hindered in its operation while providing a minimum level of regulation of medical devices, the Government and the drug regulator have demonstrated a growing propensity to lend a willing ear to the industry’s complaints and issue clarifications/amendments in the law. Significant changes in India’s pharmaceutical and healthcare sector regulation occurred in 2022. With the National List of Essential Medicines (‘NLEM’) due for change this year, the agency has also given pricing control more attention.

In this article, the author has tried to cover all the regulations of medical devices with the significant pharma industry developments in India for the year 2022.

Regulation issued for risk classification

In this section, the author has tried to explain all the regulations that have been formed by the Government related to medical devices. Let’s discuss them in detail!

To give some context, the Ministry of Health and Family Welfare (Ministry)^[1] last year published a notification that dramatically increased the MDR’s scope. As a result of the announcement, as mentioned earlier, starting on April 1, 2020, all medical devices in India will be governed by the MDR. As a result, for the purpose of the regulation, the Central Drugs Standard Control Organization (CDSCO), the top regulatory body for drugs and medical devices in India, has categorized all notified medical devices into classes A to D in ascending order of risk: low risk, low-moderate risk, moderate-high risk, and high risk. This categorization is based on the device’s intended use, the risk involved in using it, and the other criteria listed in the MDR’s First Schedule. Its risk categorization determines the regulatory standards for acquiring permits and licences for a medical device. Class C and D device makers and importers are subject to stricter paperwork and inspection requirements than those of Class A and B devices. The CDSCO has issued dynamic risk categorization notices for this reason.

In the second half of the year, the CDSCO published a number of notices updating the categorization list for medical device:

•  Risk classification for medical devices pertaining to rehabilitation: The Ministry published a revised3 categorization notice for medical equipment used in rehabilitation on July 6, 20222. In addition to prosthetics, powered lower extremity Exoskeletons, Truncal Orthoses, Congenital Hip Dislocation Abduction Splints, Denis Brown Splints, Arm Slings, Crutches, Power Knees, Abdominal Supports, and Stocking/Medical Supports, it announces the risk categorization for twenty-two new devices.
• Risk classification for medical devices pertaining to surgical instruments: The Ministry published a classification notification on September 9, 2024, to risk categorize medical devices related to non-sterile, non-powered, hand-held, or hand-manipulated surgical instruments intended to be used in a variety of general surgical operations. Four devices—Cutting and dissecting surgical instruments; Clamping and occluding surgical instruments; retracting and exposing surgical instruments; and Grasping and Holding surgical tools—have had their risk classifications announced as a result of this warning.
• Risk classification for medical devices pertaining to oncology: The Ministry released a revised categorization for oncology-related medical equipment on October 11, 2025. It notifies the risk classification for a number of new devices, such as the colonic cytology sampling set, antimicrobial post-surgical brassiere, electronic clinical breast examination system, brachytherapy radionuclide phantom test object, alternating electric field antimitotic cancer treatment system generator, and bladder instillation buffer solution, among others.
• Risk classification for medical devices pertaining to dental healthcare: The Ministry updated its notification for medical equipment used in oral healthcare on October 10, 2027. For novel equipment like orthodontic appliance bands, orthodontic elastomeric files, orthopedic dental files, and dental endodontic enlargers, it indicates the risk categorization. The list was updated again this year following the initial modification on June 3, 2022.

Extension period renewed for 5 medical devices

In this particular section, the author has attempted to explain the five (5) medical devices for which the Pricing Authority renewed the extension order capping trade margins.

The National Pharmaceutical Pricing Authority (NPPA), the body regulating medical devices and pricing, issued an order on July 29, 2022, extending the 70 per cent trade margin maximum for five medical devices until December 31, 2029. The trade margins for glucometers, nebulizers, digital thermometers, pulse oximeters, and blood pressure monitors were previously regulated at per cent at the first point of sale by the NPPA in an order dated July 13, 2021 (First Order). The price at which the distributors purchase the devices from the manufacturers is multiplied by a 70 per cent trade margin to determine these products’ maximum retail price (MRP). The current Extension Order has been issued to extend the First Order’s operation until December 31, 2022.

The current Extension Order was issued in accordance with DPCO Paragraph 19. Paragraph 19 of the DPCO enables the NPPA to set regulations for medical devices and pricing in the public interest.

New license requirements for sale of medical device

On September 30, 2022, the Ministry notified the Medical Devices (Fifth Amendment) Rules, 2022 (Amendment Rules), introducing new registration requirements for authorized agents, sellers, and retailers who want to import, sell, stock, exhibit, or distribute medical devices in India, including in-vitro diagnostic medical devices.

The Amendment Rules have integrated MDR Rules 87A, 87B, 87C, and 87D to provide the new registration requirement for selling, stocking, displaying, or offering for sale or distribution of medical devices, registration requirements, and suspension and cancellation provisions. The registration certificate holder must comply with the following conditions:

1. The registration certificate must be displayed in a prominent place on the premises, visible to the public.
2. The certificate holder must provide adequate space and proper storage conditions for the storage of medical devices. 
3. The medical devices must be purchased only from an importer or licenced retailer.

Without a wholesale or retail licence under the Drugs and Cosmetics Regulations, 1945, sellers and distributors cannot sell or trade in the Indian market and may have to apply for a registration certificate under the Amended Rules.

The Amendment Rules were created in order to control medical device vendors. Traditionally, State Licensing Agencies in certain jurisdictions required medical device vendors and distributors (including non-pharmacists) to get wholesale or retail drug licenses to sell, stock, show, or distribute medical devices.

Relaxation for public procurement of medical devices

The General Financial Regulations, 2017 were revised in 2020 to allow the issuance of worldwide bids for only INR 200 crores and above for the acquisition of items that are not accessible in India. However, under extraordinary circumstances, the Minister of Finance and/or the Directorate of Spending were permitted to carve out an exception from the requirements of previous clearances and the modification mentioned above.

Numerous members of the medical device business complained to the Ministry of Health and Family Welfare about the difficulty in gaining authorization for floating global tender enquiries. As a result, on January 6, 2022, the Directorate of Expenditure, Ministry of Finance, issued an Office Memorandum exempting 128 medical equipment from the obligation. After that, on June 21, 2022, a second Office Memorandum was published to expand the list of exempted medical devices to 371 medical devices. As a result, public purchases of certain medical items will now need fewer clearances.

New law proposed for drugs

In July 2022, the Ministry of Health and Family Welfare (Ministry) issued a proposal for the New Medicines, Medical Devices, and Cosmetics Bill, 2022 (“Draft Bill”), for public comment. The Draft Bill is intended to be a comprehensive piece of legislation that includes measures to govern, among other things, pharmaceuticals, medical devices, cosmetics, clinical trials, and internet pharmacies. If passed, the Draft Bill will replace the Drugs and Cosmetics Act of 1940 (“D&C Act”), now India’s principal drug legislation.

The Draft Law was written to keep up with changing demands, times, and technology. It offers new definitions for clinical trials, OTC medications, manufacturers, medical equipment, novel pharmaceuticals, bioavailability studies, investigational new drugs, and imported counterfeit drugs, among other things. The Draft Bill includes provisions for:

1. The establishment of a Medical Devices Technical Advisory Board;
2. The establishment of a Scientific Research Board for Ayurveda, Siddha, Sowa Rigpa, Unani, and Homoeopathic drugs;
3. Compensation for injury and death in clinical trials;
4. The licensing of online pharmacies, among other things.

The regulation of medical equipment instead of ‘drugs’ is a good development that the Draft Bill intends to bring about. All medical devices are classified as drugs and governed by the D&C Act and the Medical Devices Regulations 2020. The Draft Bill wants to remove the present restrictions and proposes a new definition for medical devices, placing them outside the jurisdiction of ‘Drugs’. Furthermore, the Draft Bill includes enabling elements for regulating e-pharmacies.

The Draft Bill is currently in draft form and will not become law. In terms of the following stages, based on public feedback, the Draft Bill may be revised further before being tabled as a bill in Parliament for consideration. It might then be approved as a new law, thereby repealing the D&C Act. There currently needs to be more information on timetables for the same.

Amendments to the Legal Metrology Rules (declaration of unit sales prices on packages)

The Ministry of Consumer Affairs (Ministry) revised the Legal Metrology (Packaged Commodities) Regulations 2011 (“LM Rules”) with the Legal Metrology (Packaged Commodities) Amendment Rules, 2022 (“Amendment Rules”), mandating the disclosure of unit sales price on pre-packaged commodity packages. After that, the Ministry issued formal explanation in the form of Frequently Asked Questions on LM Regulations (FAQs) on the obligation imposed by the Modification Rules.

The Legal Metrology Act, 2009, notified the LM Regulations, which govern the packaging and labelling of pre-packed commodities in India. It requires anybody who intends to pre-pack for sale, distribution, or delivery to include specific disclosures such as standard weight, maximum retail price, manufacturer data, quantity, and so on. Such declarations are critical for the medical device business in order to assure quality control and standardise production procedures.

In addition to the Maximum Retail Price, the Amendment Regulations mandate the statement of the unit selling price per unit (g/ml/cm) in rupees (rounded off to the nearest two decimal places) on every pre-packaged item (MRP). According to the Ministry’s explanations, the unit sale price of the pre-packaged product must be displayed on the main display panel. If a free pack is included with the sale pack, the unit sale price should only display on the sale pack. The net contents/quantity of the free pack would be excluded from the calculation of the unit sale price for the sale pack.

The Amendment Rules, when read in accordance with the Ministry’s clarifications, exempt the declaration of the unit sale price on packages (other than drugs, fast-food items, and packaged commodities sold in packages up to 10g/10ml) where such price is equal to the MRP; on wholesale packages; or in advertisements and on e-commerce websites where such price is equal to the MRP.

The Amended Regulations will be implemented on October 1, 2022.

CDSCO permits import of drugs with residual shelf life than 60 %

On May 6, 2022, the CDSCO published a circular extending the applicability of prior circulars that allowed the import of pharmaceuticals having a residual shelf life of less than 60%. The prolongation is valid until October 31, 2022, or until additional orders of the CDSCO, whichever comes first.

The circular was published in response to industry representations and to secure the country’s sustained supply and availability of pharmaceuticals in the face of the COVID-19 epidemic. Rule 31 of the D&C Regulations forbids the importation of drugs with a residual shelf life of less than 60% on the date of importation. In extreme circumstances, the CDSCO may authorise the import of any medicine having a shorter shelf life before it expires.

Different schemes introduced

A. Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP): The Pradhan Mantri Bhartiya Janaushadhi Pariyojana initiative opens specialised outlets known as Pradhan Mantri Bhartiya Janaushadhi Kendras (PMBJK) all throughout the nation to deliver generic medications to the populace at cheap costs. 8916 PMBJKs have been established around the country as of November 30th, 2022. The goal is to have 10500 kendras by March 2025. Jan Aushadhi drugs are often 50%-90% less expensive than branded medicines accessible on the free market. Medications are exclusively purchased from World Health Organization – Good Manufacturing Practices (WHO-GMP) accredited vendors to ensure product quality.

PMBJP’s product basket includes 1759 medicines and 280 surgical procedures. By March 2025, the goal is to expand the product basket to include 2000 medicines and 300 surgical products, ensuring that all essential medicines covering therapeutic groups such as – Anti Diabetics, Cardiovascular Drugs, Anti-Cancer, Analgesics & Antipyretics, Anti Allergic, Gastro Intestinal Agents, Vitamins, Minerals & Food supplements, Tropical Medicines, and so on are available.

B. Strengthening of Pharmaceutical Industry (SPI): The scheme will run for five years, from FY 21-22 to FY 25-26, and would cost Rs.500 crore. The Scheme is made up of three components or sub-schemes:

• Assistance to Pharmaceutical Industry for Common Facilities (APICF)
• Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)
• Pharmaceutical & Medical Devices Promotion and Development Scheme (PMPDS)

Twenty project applications were received under the sub-scheme Aid to Pharmaceutical Industry for Common Facilities (APICF), with 17 being judged suitable under the plan. Seven of the 17 project concepts have been shortlisted and asked to submit the DRP by December 15th, 2022 for further review and finalisation for project approval.

More than 60 applications have been lodged under the Sub-Program Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS).

PLI for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ Drug Intermediates (DIs)/ Active Pharmaceutical Ingredients (APIs):

The Scheme was adopted with the goal of achieving self-sufficiency and minimizing dependency on imports in important KSMs/DIs/APIs. The initiative would increase local manufacture of targeted KSMs, DIs, and APIs by attracting major investments in the industry, reducing India’s reliance on crucial API imports.

The sub-scheme would run from fiscal year 2020-21 through fiscal year 2029-30, with a total financial investment of INR 6,940 crores. The financial incentive given by the sub-scheme is based on the sale of 41 specified items divided into four Target Segments. In all, 249 applications were received throughout the course of four rounds. 51 applications have been approved, with a total pledged investment of INT 4,138.41 crore, of which INR 1707 crore has already been spent. These 51 projects are planned to employ around 10,598 people. Work on these projects has already resulted in the employment of 1,907 people till September 2022. According to the Quarterly Review Report (QRR) for September 2022, 21 projects have been commissioned with a total pledged investment of INR 843.79 crore and an actual investment of Rs. 890.82 crore.

C. PLI Scheme for promoting Domestic Manufacturing of Medical Devices: The Plan aims to increase local production while also attracting big investments in the Medical Devices Industry. The plan would run from FY 2020-21 to FY 2027-28, with a total financial investment of INR 3,420 crores. Over a period of five (5) years, chosen firms will receive a 5% cash incentive on incremental sales of medical devices made in India and covered by the scheme’s Target categories.

Cancer care/radiotherapy medical devices, Radiology & Imaging medical devices (both ionising & non-ionizing radiation products) and Nuclear Imaging devices, Anaesthetics & Cardio-Respiratory medical devices including Catheters of Cardio Respiratory Category & Renal Care medical devices, and All Implants including implantable electronic devices” are the four Target Segments identified under this Scheme.

In all, 42 applications were received over the two application rounds. Out of 42 applications, 21 were accepted, with a promised investment of INR 1,058.97 crore and an estimated job generation of 6,411 people. As of September 2022, 13 projects have already been commissioned for 31 goods. Up to September 2022, the actual employment produced is 2,892 people.

D. PLI Scheme for Pharmaceuticals: The goal of this programme is to improve India’s manufacturing capabilities by boosting investment and output in the industry and helping to product diversification in the pharmaceutical sector towards high-value items.

The plan applies to pharmaceutical sector in three categories:

Category 1: Complicated generic drugs; biopharmaceuticals Patented medications or pharmaceuticals whose patents are about to expire; Drugs based on cell or gene therapy; orphan medications HPMC, Pullulan, enteric, and other special empty capsules; Phyto-pharmaceuticals; Complicated excipients Additional medications that have been authorised.

Category 2: Active Pharmaceutical Ingredients / Key Starting Materials / Drug Intermediates (with the exception of the 41 eligible goods already covered by the “PLI Scheme for promoting domestic manufacture of key KSMs / DIs / APIs”).

Category 3 (Drugs not covered under Category 1 and Category 2): Drugs that have been repurposed; auto immune medications, anti-cancer drugs, anti-diabetic pharmaceuticals, anti-infective drugs, cardiovascular drugs, psychiatric drugs, and anti-retroviral drugs; in vitro diagnostic devices other medications that have been authorised; some medications that are not made in India.

The Plan will run from Fiscal Year 2020-21 to Fiscal Year 2028-29. The plan offers incremental sales incentives to chosen participants in various areas at varied rates over the years ranging from 3% to 10%.

The initiative is projected to attract more than 17,000 crores in investment in the pharmaceutical sector, encourage the manufacturing of high-value products in the country, and improve the value addition in exports. These 55 candidates have already invested a total of INR 15,164 crore.

The assistance provided through PLI programmes is projected to boost the manufacturing of high-value products in the country while also creating opportunities for both skilled and unskilled workers, with an estimated 20,000 direct and 80,000 indirect jobs. Up to September 2022, the actual employment produced is 22,560 people.

E. Medical Device: The medical device industry is a critical part of the healthcare industry. The present market size of the medical devices industry in India is expected to be USD 11 billion, with a 1.5% share of the worldwide medical device market.

The importance of India’s medical devices sector to health was highlighted during the COVID-19 pandemic, when medical equipment and diagnostic kits like as Ventilators, IR Thermometers, PPE Kits & N-95 masks, Rapid Antigen Test Kits, and RT-PCR kits, among others, played a significant role. Recognizing the sector’s importance, a few further notable interventions for the Medical Devices Sector, in addition to PLI and Medical Device parks, were implemented in 2022, which are:

• Reconstitution of National Medical Devices Promotion Council: On August 05 2022, the Department reorganised the National Medical Devices Promotion Council as an inter-departmental council to communicate regularly with the medical device sector to take up regulatory concerns that are scattered across multiple departments for settlement. This institutional structure is anticipated to handle the multidisciplinary challenge of the medical devices sector.
• Export Promotion Council for Medical Devices : The Department of Commerce has sanctioned the formation of a separate Export Promotion Council (EPC) for Medical Devices in YEIDA, Uttar Pradesh, in an O.M. dated September 21, 2022. The Department has advised the OSD that additional action is required. The Medical Devices Industry will benefit from the EPC-MD. 

F. Pricing of drugs: The Department of Pharmaceuticals (DoP) notified the modified Schedule-I of the Drugs Prices Control Order (DPCO) 2013 on November 11, 2022, based on the Ministry of Health and Family Welfare’s notification of the National List of Essential Medications 2022 on September 13, 2022. Based on this, the National Pharmaceutical Pricing Authority (NPPA), an associated office of the DoP, is adjusting the Ceiling Prices of pharmaceuticals in Schedule-I in accordance with the existing provisions of the DPCO, 2013.

On the occasion of the NPPA’s 25th Foundation Day on August 29, 2022, an updated version of the Integrated Pharmaceutical Database Management System 2.0 (IPDMS) was launched, which is an important step towards bringing in improved technology to facilitate the interface between the government and stakeholders. On the same occasion, a new edition of the Pharma Sahi Dam Mobile App 2.0 was released, empowering customers.

Conclusion

Once again, the adjustments implemented this year were in keeping with the Government’s goals of promoting India as a reputable pharmaceutical center. Significantly, the Draft Bill has been historical regarding the Government’s openness to acknowledge the gap between regulation and on-the-ground activities.

The pharmaceutical industry has seen a lot of regulatory activity in the first half of 2022. Many regulatory improvements have occurred to streamline the sector’s regulation, including introducing new Indian pharmacopoeia, notice on over-the-counter pharmaceuticals, display of unit sale price of packages, and so on. Regarding regulatory reforms in the pharmaceutical business, the second half of the year saw relatively slow activity. The most noteworthy of these advances are the presentation of a proposed law to replace existing pharmaceutical regulation and the incorporation of the new National List of Essential Medicines, short form NLEM, into drug price regulation law.

Overall, 2022 has been a positive year for the sector, with just minor hitches.

Frequently asked questions (FAQs)

Read Our Article: A Step By Step Guide For Registration Process For Medical Devices In India