Treating medical devices on par with drugs will raise costs: ICRA

The Centre’s decision to notify all medical devices as drugs and bringing them under purview of the Drugs and Cosmetics Act, 1940, from April is bound to push up the cost, according to credit rating agency ICRA.

“Companies will now have to obtain approval to manufacture, import and sell medical devices in the country thus increasing the cost of compliance, leading to longer lead time and higher expenses in launching new products, thereby resulting in an increase in costs,” said Kapil Banga, assistant vice-president, ICRA.

Overarching challenge

Regulatory action continues to be the overarching challenge for the healthcare sector. The latest notification of the Union Ministry of Health and Family Welfare paves the way for higher regulation of medical devices under the Drugs Price Control Order (DPCO), a statement from ICRA said. The move comes shortly after the Budget announcement introducing 5% health cess on import of medical devices, making these devices costlier for hospitals. “It is believed that much of the price hike will be passed on to the patients, cushioning the impact on the profitability margin of hospitals,” Mr. Banga said.

Though the notification does not immediately indicate any price cap, the increased regulatory requirements will lead to higher input costs. The notification covers all devices used for diagnosis, life support, treatment of any ailment and the ones used to disinfect other medical devices. It also covers the software used in medical instruments. Thus, almost the entire gamut of medical devices will come under the ambit of the notification, ICRA said.

The Central Drugs Standard Control Organisation will be regulating the medical devices. The order will come into effect on April 1, 2020. The consumables/devices will be brought under regulation in a phased manner up till April 1, 2021.

The rules will be voluntary for the first 18 months and become mandatory after that. Syringes, heart valves, I.V. cannule, surgical dressing, and cardiac stents will come under the regulation on the effective date, while ultrasound equipment will come under the regulation on November 1, 2020. Nebulisers and digital thermometers will be included on January 1, 2021 and high-end medical devices such as PET scanner, MRI equipment, dialysis machines will come under regulation on April 1, 2021.

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Printable version | Sep 25, 2021 2:59:33 PM |

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