Trapped in a regulation labyrinth: The case of the Indian medical device industry (part 2)

Dinar Kale

The Open University

(Continued from “Trapped in a regulation labyrinth: The case of the Indian medical device industry (part 1)”)

Mushrooming of counterfeit products

Without any regulation, the market was populated by spurious manufacturers and counterfeit traders who used scrap material as raw material or imported goods of uneven quality. Many small trading companies mushroomed in the country which imported products from China, Korea and Taiwan at a very low rate, even lower than Indian firms’ production cost. The market is flooded with non-standard look-a-like counterfeit products, which are sold at very low prices. Many medical devices are implanted into the human body for critical care. Implanting a poor quality or defective device can cost the life of the patient, minimum standards are therefore required as are some control on pricing. This lack of monitoring in India could have serious consequences for poor patients’ healthcare, as these people were recipients of cheap counterfeit and unsafe medical devices. In 2004 these consequences became apparent when state run JJ hospital in Mumbai used unapproved drug-eluting stents on as many as 60 high risk cardiac patients. The stents were manufactured by Occam, a Netherlands-based company and marketed under the brand name Axxion. These stents were not approved for use even in Netherlands but they were marketed in unregulated Indian medical device market by the Mumbai-based trading company. The government shut down the importer and a local stent company as a result of this and both of them went to court showcasing absence of rules. As a result high court ordered government to set rules and standards for the medical device industry.


“Another problem was that the adoption of the D&amp,C Act for medical devices was not implemented properly.”


Thus, the Indian healthcare system severely suffered from the lack of regulations, it handicapped local manufacturers, allowed unrestricted import of sub-standard products, swamped the market with counterfeit products and created a market which was skewed in favour of MNCs and spurious local traders.

Era of wrong regulation (2005 – till now)

In 2005, taking cognisance of JJ Hospital case and Mumbai high court order, the Indian government listed 10 medical devices under the Drugs and Cosmetics (D&amp,C) Act. These products included cardiac stents, drug-eluting stents, catheters, intra-ocular lenses, IV cannulae, bone cements, heart valves, scalp vein sets, orthopaedic implants, and internal prosthetic replacements. These products were mandated to get licenses for their manufacture, sale and distribution. These rules have been approved by the Ministry of Health and Family welfare and the guidelines issued came into force from March 1, 2006.

In India the major source of pharmaceutical regulations is the Drugs and Cosmetics Act 1940. This legislation applies to the whole of India and for all products whether indigenous or imported. The legislation is enforced by the office of the Drugs Controller General of India (DCGI). The DCGI is authorised to handle product approval standards, permit clinical trials for the introduction of new drugs, and to regulate import license for new drugs. However, there was a serious problem with medical devices under Drugs and Cosmetics (D&amp,C) Act. In Europe and the US, separate laws govern medical devices and implants while pre-independence D&amp,C Act is meant for drugs and cosmetic only. This created a widespread debate on the legal status of medical devices. Several experts excluded medical devices from the drug list as the Drugs &amp, Cosmetics Act does not cover medical devices. It was clearly evident that the regulatory framework and infrastructure designed to govern pharmaceutical and cosmetic products is totally inadequate for governing medical devices due to the nature of differences in products, their action in human body and packaging. Drugs are metabolised in the body while devices have no such action on the body.


“Authentic Indian device developers and manufacturers suffered the most…”


Another problem was that the adoption of the D&amp,C Act for medical devices was not implemented properly. It was not accompanied by implementing guidelines and that created some confusion in the early stages. It left many companies speculating how the regulations would be carried out. Customs authorities in Mumbai began holding up shipments of medical devices, prompting complaints from industry. It created a shortfall of devices in the market exposing a lack of clarity in regulation and a lack of capacity to review and approve the increasing number of applications on the government’s part.

Soon, more problems began surfacing and the main problem that emerged was an inconsistent application of the current guidelines. These problems were sourced in part to multiple levels of government authority involved in enforcing the guidelines, as well as inconsistent interpretation and application of the regulatory guidelines by customs officials at the ports, state drug controllers, and officials within CDSCO (Central Drugs Standard Control Organization). Some companies struggled to get licenses for products for more than 6–7 months even if they were in market for more than two decades and had received regulatory approval for their products from European regulators.1

By 2011 it became apparent that the D&amp,C Act is not ideal for devices and rather than helping local authentic manufacturers, it endangers their survival. Similar to the US FDA and European CE regulation, the Indian medical device industry needs a specific device industry focused regulation. However, lack of communication between various government departments, limited understanding of the issues at hand and severe infrastructural problems are major hurdles in creating any effective regulation. Dr. Valiathan points out difficulties in developing optimal regulation,

“The Indian Medical Regulatory Authority (IMDRA) proposed by a Government Committee would have been optimal. Thanks to turf war in the Government, it has been substituted by a Committee under the Drug Controller General of India. It is too highly centralised and too bureaucratic to promote R&amp,D and industrial activity in relation to medical devices and instrumentation. Neither has become an Act yet”

The Indian government is still working toward establishing a medical regulatory regime but struggling to set up governance structure that can distinguish between medical devices and pharmaceuticals.

The Indian medical device was totally ungoverned from 1947 until 2005 and this was the period where local industry witnessed no growth, and domestic market was swamped by unaffordable devices by MNCs and counterfeit products from spurious local traders. Authentic Indian device developers and manufacturers suffered the most as they struggle to gain acceptability of their products due to lack of any regulation and regulating authority. MNCs enjoyed the most benefit of the situation through monopoly rents severely restricting access of affordable healthcare to poor populations of India.


1. Kamath (2007) Device malfunction, Business World


About the author:

Dinar Kale is a Lecturer of International Development and Innovation at The Open University. He can be contacted here at the following email address:

How can the Indian government establish a medical regulatory regime?