When it comes to medical devices, India is mostly dependent on imports. To change this scenario, the government is actively implementing several measures to increase domestic production.However, several guidelines are needed to understand the metes and bounds of the Indian Patents Act to mitigate the complexities involved in filing and enforcing medical device patents.
Due to its increasing population and rising cases of lifestyle diseases, the demand for affordable healthcare in India is currently on the rise. To cater to the needs of its citizens, the country currently depends heavily on imports. Importing such products is cheaper in comparison to procuring their raw materials in India. This also helps effectively lower their market prices, which increases affordability.
This article explores how India is a major import market, its trends in importing medical devices, patenting scopes and challenges.
Why Is India Such a Major Import Market?
As per latest reports by the Commerce Minister, India’s merchandise imports reached USD 714 billion in FY 2022-23. This shows a 16.5% growth in comparison to last year’s figures of USD 613 billion.
There are 6 product categories, which constitute almost 82% of India’s imported merchandise. They are as follows:
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- Coal & Coke
- Petroleum
- Diamonds
- Machinery
- Electronics
- Pharma, Plastics and Rubber
Major imports in this regard include active pharma ingredients (APIs), organic chemicals, fertilisers, rubber and plastics. They constituted almost 13.8% of India’s import volume in FY 2022-23, with the figures reaching around USD 98.2 billion.
In this regard China was the biggest contributor, supplying almost 65% to 70% of India’s imported APIs.
Trend of Medical Device Imports in India
India imports approximately 80% of its medical devices from foreign suppliers. This usually consists of high-end equipment for ultrasonic scans, polymerase chain reaction (PCR) tech, medical imaging, cancer diagnostics, etc. In this regard, India depends heavily on 5 nations – USA, China, Germany, Netherlands and Singapore.
Between FY 2021-22 to 2020-21, India’s medical devices imports have increased from ₹44,708 crore to ₹63,200 crore, showing a 41% growth. Now, further analysis has indicated the growth in demand for certain types of medical devices. These are – surgical instruments, IVD reagents, implants, disposables, electronic equipment and consumables.
Between the periods of FY2016-17 to FY2021-22, India’s medical device imports increased from ₹4,569 crore to ₹40,649 crore. During this period, the import figures for surgical equipment increased from ₹243 crore to ₹1,260 crore.
Despite the government trying to reduce its dependency on Chinese imports, this country is currently the biggest exporter of medical devices to India. This was especially the case during the COVID-19 pandemic when there was an acute dearth of medical devices in the country.
In 2020 alone, the Karnataka Government decided to import 1 lakh COVID-19 rapid testing kits from a manufacturer based in Beijing to ramp up its testing efforts.
Additionally, in FY 2021-22, imports from this nation reached ₹13,538 crore, showing a 48% year-on-year growth. Whereas, for the US, India is an almost 10 billion dollar market, thanks to the emergence of international hospital groups like Fortis, Apollo, Max and Hinduja Group.
Scope of Filing Medical Device Patents in India
India is a major import market when it comes to medical devices. However, companies must also know the scope of patenting their inventions, in order to safeguard their intellectual property rights.
Organisations can file patents in India for medical devices, subject to specific conditions. However, inventions related to the method of treatment are not eligible for patentability. Patent eligibility for medical devices falls under Sections 3(i), 3(f) and 3(k) of the Indian Patent Act.
Section 3(i)
Section 3(i) states that any process which deals with the medicinal, prophylactic (therapeutic and diagnostic), curative, surgical or other treatment processes for humans or animals, that helps them become free of disease or increase their economic value or that of their products, is not applicable for patentability.
Section 3(f)
Now, Section 3(f) dictates that duplication or mere arrangement or re-arrangement of known medical devices, which function independently in a known way, will not be eligible for patenting.
Thus, for inventions to be deemed patentable under this section, inventors must produce better or cheaper devices, or devices showing superior results than their predecessors already present in the market. In this regard, combining old integers which may produce an improved result or better process is applicable. However, merely combining known integers and not applying any inventive step will not work.
Section 3(k)
Section 3(k) of the Indian Patent Act denies patentability of algorithms, computer programs, business or mathematical processes. Now, the functioning of medical devices can depend upon specific software. However, if they create a specific technical effect that is an improvement over the available technology and is unique, the invention may be patentable.
How Can India Reduce its Dependency on Foreign Medical Imports?
To reduce India’s dependence on medical device imports, the government launched the National Medical Device Policy 2023 on 26 April 2023. Here are its objectives:
1. Streamlining Regulatory Procedure
The current licensing framework for medical devices in India is not unified. It falls under the governance of several regulators like the State Licensing Authorities, National Pharmaceutical Pricing Authority and Central Drugs Standard Control Organisation. Also, special devices like radiological equipment fall under the jurisdiction of the Atomic Energy Regulatory Board.
Furthermore, there are various policies, guidelines and legislations like the Drugs and Cosmetics Act, 1940 and the Medical Devices Rules, 2017, which come into play, thus increasing the overall complexity of the licensing process.
Therefore, to address such issues, the policy aims to create a ‘Single Window Clearance System’ for licensing medical devices. It also states the gradual expansion of the Bureau of Indian Standards (BIS) roles as per international standards. Doing so will help maximise the safety and quality aspects of medical devices. Moreover, it will assist in creating a consistent pricing regulation, which can help maintain patient protection and affordability.
2. Promoting R&D
The National Medical Device Policy 2023 will complement and support the “Draft Policy to Catalyse Research & Development and Innovation in the Pharma-MedTech Sector in India”. This policy aims to fulfil this objective by promoting research and development and sustaining an ecosystem that can facilitate indigenous innovation in this field via the collaboration of industry and academia.
To achieve this, the policy will aid new innovations by creating Centres of Excellence, supporting start-ups, promoting ‘atmanirbhar’ technology products and more. The policy may also create a fund to support R&D activities in domestic medical equipment manufacturing. It also aims to maximise the commercialisation and utility of government-aided inventions by combining the resources of institutions like BIRAC, Start-up Mission, AGNIi, etc.
3. Promoting Infrastructural Development
To promote infrastructural development, the policy aims to increase the number of medical device parks, especially near Special Economic Zones. Doing so will improve connectivity as well as infrastructural capabilities, which can facilitate smooth integration with the medical device ancillary sector.
This policy will try to establish concentrate clusters of manufacturing units, warehouses, laboratories and testing centres located nearby. It will help lower manufacturing expenses, increase affordability, enhance the quality of high-end medical devices and improve their domestic availability.
The policy suggests a phased manufacturing model in case of critical components, to boost domestic manufacturing and negate supply chain disruptions.
4. Developing Human Resources
To ensure a steady supply of skilled human resources in the innovation value chain, the Policy incorporates several measures. Some of them are as follows:
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- Skilling, reskilling and upskilling of individuals.
- Certification courses
- Skilling activities and courses under the Skill India Portal and National Skill Qualification Framework.
- Collaborating with foreign companies to develop medical technologies at a rapid pace.
- Allocating skilled professionals for developing high-end medical equipment.
5. Attracting Investments
The National Medical Device Policy 2023 will encourage venture capital funding, public-private partnerships and private investments for developing the medical devices sector. Furthermore, it will complement the Department for Promotion of Industry and Internal Trade’s Start-up mission and follow its methods to target the medical devices sector. The Policy will also leverage schemes like the Ayushman Bharat program and the Public Procurement (Make in India) Policy.
6. Spreading Awareness and Brand Positioning
Spreading awareness of medical devices among the Indian masses is another prime objective of this policy. To facilitate this, it aims to establish an Export Promotion Council which will be solely dedicated to the medical devices segment.
It will initiate projects and studies to teach the best international skilling systems and medical device manufacturing processes. Such activities will help propagate awareness of medical device safety among the public. It will also encourage other forums to build stronger networks, share knowledge and take the sector to new heights.
Conclusion
In addition to all these efforts being taken by the government, guidelines are needed to help address patentability and enforcement issues while assessing medical devices and use of medical devices based on the Indian Patents Act as it currently stands. As medical devices use a combination of software, hardware and biotechnology, the chances of unintentional patent infringement remain prevalent. Apart from this, the growing instances of counterfeit devices also pose a substantial threat to patient health and the IP rights of medical device manufacturing companies.
Focusing on these aspects can be an excellent way to encourage companies to continue making progress in this field. As a result, it will help increase domestic production and gradually reduce India’s dependence on medical device imports.
Author: Anand Barnabas, Practice Head – Patent, Mechanical & Automotive