Medical Device- Conjoined Twin with Pharmaceutical Sector

Why doesn’t Apple stop for a year and make medical devices? When people talk about technology, that’s where I start to get a little hot under the collar because I know that it’s the key to solving some of the world’s biggest problems. Having a faster, thinner telephone is not one of the world’s biggest problems. – Luke Perry

INTRODUCTION

The Medical Device- an industry niche, capital intensive and with long gestation period, when it comes to Regulations and Laws corporations have to navigate while advertising (almost NIL legitimate scope), marketing and promoting their products is Conjoined Twin with the Pharmaceutical sector.

STATISTICS

India is amongst top twenty global medical devices market and fourth in Asia only after Japan, China and South Korea.[1]  An industry valued close to INR 50,026 crore in the year 2018-19, poised to reach close to 50 billion USD mark.[2]

Imports dominate medical devices market in India with imports worth INR 43,365 crore compared against export of INR 16,300 crore.[3] The disparity is largely because of imbalance in innovation and technology originating from well-developed eco-systems, keeping India contained to a certain degree.

BOOST AND CHALLENGES OF THE SECTOR

The on-going pandemic has made Government of India reflect on the import to manufacturing gap which has resulted in the launch of Production linked Incentive Schemes[4] directed towards creation of Medical Parks and promoting domestic manufacturing of Medical Devices.

A bird’s view level, the sector has to navigate regulatory and market challenges which revolve around:

  1. measured with the yardstick applied to the pharmaceutical industry;
  2. lack of specific legislations permitting fair and balanced marketing strategies;
  3. Price controls measures.

HOW DO YOU ADVERTISE / MARKET OR PROMOTE MEDICAL DEVICES?

The marketing journey of Medical Devices is a complex one. The regulations make for being in a game of “laser guns!” You dodge, duck, conform, slide to make it.

  1. Direct – to – Consumer Marketing is not possible for Medical Devices. Products like Heart Lung Machine, Orthopedic implants, syringes, Stent, Oxigenator, Catheters, Grafts, bone cement etc., cannot be channeled through DTC. While consumer is the end user, he isn’t the purchaser or the one capable of weighing the differentiators.
  • Marketing and sale of Medical Devices requires the web of Health Care Providers (“HCPs”) and Registered Medical Practitioners (“RMPs”), who are regulated entities on ethical grounds. These, ethics regulations, try to govern and restrict bias influencers in their decision-making process. Whether it is for the medicines they prescribe or the Medical Device they chose amongst all.

Corporations have a very limited window to augment sales through legitimate strategy and routes.

NAVIGATE LAWS AND REGULATIONS 

  1. The Drugs and Cosmetics Act, 1940 (“DCA”);
  2. Drugs and Cosmetics Rules, 1945 (“DCR”);
  3. The Medical Device Rules 2017 under the DCA (“MDR”);
  4. The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 (“DMRA”);
  5. The Drugs and Magic Remedies (Objectionable Advertisement) Rules, 1955 (“DMRA Rules”);
  6.  The Drugs and Magic Remedies (Objectionable Advertisement) Amendment Bill, 2020 (“DMRA Bill”);
  7. Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002(“MCI Regulations”);
  8. The Uniform Code of Pharmaceutical Marketing Practices (“UCPMP”) (self-regulating Code);
  9. The Uniform Code for Medical Device Marketing Practices (“UCMDMP Draft Code”) (draft awaiting government approval); and
  10. Essential Commodities (Control of Unethical Practices in the Marketing of Drugs) Order, 2017 (“Draft Order”) (meant to be introduced through amendment to the Essential Commodities Act, 1955).

SPANNING IT TOGETHER

  1. DMRA defines advertisement as Advertisement includes any notice, circular, label, wrapper, or other document, and any announcement made orally or by means of producing light, sound or smoke”.
  • The Advertisement Standard Council of India (ASCI)
  • Self-regulatory voluntary organization of the advertising industry defines an advertisement as a paid-for communication, addresses to the public or a section of it, the purpose of which is to influence the opinions or behavior to those to whom it is addressed. Any communication which is in the normal course would be recognized as an advertisement by the general public would be included in this definition even if it is carried free-of-charge for any reason.”
  • The Medical Device Rules clarifies provisions of the Drug and Cosmetic Rules regarding advertising and promotion. Medical Device Rules do not specifically govern advertisement. MDRdefines Medical Devices as
  • “All devices including an instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including a software or an accessory, intended by its manufacturer to be used specially for human beings or animals which does not achieve the primary intended action in or on human body or animals by any pharmacological or immunological or metabolic means, but which may assist in its intended function by such means for one or more of the specific purposes of ― (i) diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder; (ii) diagnosis, monitoring, treatment, alleviation or assistance for, any injury or disability; (iii) investigation, replacement or modification or support of the anatomy or of a physiological process; (iv) supporting or sustaining life; (v) disinfection of medical devices; and (vi) control of conception”

37 medical devices notified under the Medical Device Rules still remain regulated as “Drugs” under DCA.

  • Drugs and Cosmetic Rules apply to notified medical devices under the Medical Device Rules. This separation may come about when the UCPMDMP draft order is made into an applicable code. Till such time, Drugs and Cosmetic Rules apply to Medical Devices. Specific restrictions under the Drugs and Cosmetic Rules, prohibits claims of “prevention” or “cure” on enclosed drugs and Medical Devices of aliments listed under Schedule J of DCR. The schedule includes diseases like blindness, cataract, deafness, genetic disorders and bronchial asthma etc.[5]
  • Drugs and Magic Remedies (Objectionable Advertisement) Act (DMRA), restricts general advertising of certain drugs and medical devices and includes the labelling restrictions under DCR (item 3, above). These requirements apply to manufacturers, importers and all individuals of the drugs and devices. There are certain diseases whose diagnosis, treatment, cure and mitigation cannot be advertised.[6] The Ministry of Health and Family Welfare has proposed the Drugs and Magic Remedies (Objectionable Advertisement) Bill, 2020[7] to amend the Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 to include electronic advertisement by amending clause 2(a)
  • ‘advertisement’ means any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice, banner, poster or such other documents“.

Interestingly, DMRA Rules permit advertisements can be sent secretly to RMPs by post in a confidential manner.[8]

  • The MCI Regulations governs the RMPs and prohibits them from granting-
  • approval, recommendation, endorsement, certificate, report or statement with respect of any drug, medicine, nostrum remedy, surgical, or therapeutic article, apparatus or appliance or any commercial product or article with respect of any property, quality or use thereof or any test, demonstration or trial thereof, for use in connection with his name, signature, or photograph in any form or manner of advertising through any mode nor shall he boast of cases, operations, cures or remedies or permit the publication of report thereof through any mode”[9]

A Notification of 2009 to the MCI Regulations, prohibited RMPs from accepting gifts, travel facilities, hospitality, cash and monetary grants from pharmaceutical and allied industries. The MCI Regulations requires that RMPs maintain their professional autonomy and restrain from any sort of endorsement. Violation can result in removal from Indian Medical Register. Thus, currently the amendment proposed through the DMRA Bill and the definition of advertisement under the ASCI include digital advertisements for Medical Devices. Promotional activity directed through HCPs in digital space can be a little more complicated as it will be governed by MCI Regulations in addition to the above.

  • Uniform Code of Pharmaceutical Marketing Practices (UCPMP), is a self-regulating Code applicable to promotion and marketing of drugs and medical device by companies to HCPs. UCPMP is largely a code directed to self-regulation of pharmaceutical industry. And in the absence of a separate code for the Medical Device, currently, UCPMP is considered the self-regulatory code for the Medical Device corporations. The Uniform Code of Medical Device Marketing Practices Draft, (UCMDMP Draft) would be the first separate self-regulatory code which, if implemented will be applicable to the Medical Device industry. 
  • UCPMP acts as the self-regulating code for ethical marketing and broadly expects corporations to remain ethical in its marketing efforts. There is no conclusive reason to believe, the code proposed for Medical Device through UCMDMP Draft will be different from these principles.
  • Claims regarding novelty, usefulness and safety to be backed up by scientific data;
  • Promotional samples to bear minimum level of information for HCPs to exercise discretion without bias.
  • Samples to bear accurate representation of the quality.
  • Restriction on samples for better accountability. 
  • Restrictions on gifts, pecuniary advantages to HCPs who are qualified to prescribe the drugs.
  • No extension of travel facility to HCPs and their family member for seminars and conferences.
  • Legitimate needs of HCPs services shall be documented for the purpose of their appointment as affiliates. Restriction on number of affiliates and compensation for the same.

Doctors have started demanding that the UCPMP be made mandatory for Pharmaceutical companies. There is also a recommendation by Drug Association Networks for a mandatory mechanism where companies must make periodic, mandatory disclosure of payments made to doctors, including through third parties. With such information being put in public domain.

WORLD VIEW / INDIA

  • As of June 23, 2020, with the intent to bring more transparency in healthcare services, a federal judge has upheld a Trump administration policy that “requires hospitals and health insurers to publish their negotiated prices for health services.”
  • Apparently, 51 US top generic drug manufacturers are facing lawsuits. Novartis AG is undertaking to pay $225 million under a settlement to the DoJ and $112 million to the SEC, dodging a criminal fine of over $233 million. The accusations have been for bribery, forged contracts, FCPA violations to increase use of their products in multiple geographic markets between 2012 & 2016.

With globally, nations moving close to transparency on healthcare and coming down strong on ethical practices and compliance measures of pharmaceutical industry for doing business, it is a clear indication of the preparation corporations must possess.

Challenges for India:

  • The situation is good and bad. Good, because nothing specific prevents adoption of smart strategies for promoting and marketing these products and bad because, it runs the risk of being tainted in the same colour as the pharmaceutical and be victim to similar harsh outcomes.
  • GoI may also well choose to incentivise domestic manufacture of Medical Device. It may offer a level playing ground by discouraging imports. Enforcement of the UCPMDMP Draft + the Draft Order (which will amend the Essential Commodities Act, 1955) could be the much delayed clarity and enforcement power to the sector.
  • Currently, there are corporations in India who believe that a strict compliance regime in marketing and promoting of Medical Devices is not required.

CONCLUSION

  1. MCI Regulations, MDR Rules, DCA Rules UCPMP lend interpretive restriction to promotional activities that could influence or influence decision making of HCPs. The impact of violating these, some of these or all of these could range from heavy fines, legal costs, loss of license and RMPs facing license suspension.
  • So long as HCPs and corporations follow these in good faith, a compliant marketing strategy, comprising of CME events, healthcare education at secondary healthcare level, Telehealth initiatives etc, can be cultivated into the promoting and marketing strategy.
  • If the Draft Order under the Essential Commodities Act, which attempts to regulate production, supply, distribution and trade & commerce of medical devices and drugs as essential commodities, is brought into force, there could be lesser smart legitimate options available to corporations to build their marketing strategy. Currently, the Draft Order has faced strong lobbying by HCPs and companies and is languishing with the Niti Aayog.[10] There is also a possibility that Medical Devices could be left out of the Draft Order.

Inducement by the corporations of HCPs, which could potentially bias ethical choices, is a cause of concern for larger public health interest. Prime Minister of India has been vocal about this issue against pharmaceutical companies by stating that corporations should to strictly adhere to ethical marketing tactics and not to bribe the HCPs.[11] 

For India to settle the “muddy water” and remain vigilant about how it operates within this system–permeable laws, with moderate disclosure norms of payments to HCPs and other entities, number of proctorship contracts, number of CME events, measurable impact in contributing to healthcare- could be the way forward.


Disclaimer: This Note is for general information only and not intended for solicitation. Please do not treat this as a legal advice of any sort. Views contained in this, are personal with interpretive value of the author and teams assisting the author.

Readers are encouraged not to rely solely on these contents before making any decision.


[1]Department of Pharmaceuticals, Production Linked Incentive Scheme for Promoting Domestic Manufacturing of Medical Devices (June 26, 2020), https://pharmaceuticals.gov.in/sites/default/files/Production%20Linked%20Incentive%20Scheme%20for%20Promoting%20Domestic%20Manufacturing%20of%20Medical%20Devices_0.pdf

[2]Sector Survey: Medical Devices,(June 25, 2020),   https://www.makeinindia.com/article/-/v/sector-survey-medical-devices

[3] Supra Note 1

[4] Ministry of Chemicals and Fertilizers Department of Pharmaceutical on May 28, 2020.

* Production Linked Incentive Scheme for promoting Domestic Manufacturing of Medical Devices; and

* Scheme for Promotion of Medical Device Park.

[5] Rule 106, Drugs and Cosmetic Rules, 1945

[6] Section 3, Drugs and Magic Remedies (objectionable Advertisement) Act, 1954

[7] Ministry of Health and Family Welfare, Drugs and Magic Remedies (Objectionable Advertisement) (Amendment Bill), 2020, (June 26, 2020) , https://main.mohfw.gov.in/sites/default/files/Draft%20of%20the%20Drugs%20and%20Magic%20Remedies.pdf

[8] Rule 5, Drugs and Magic Remedies (objectionable Advertisement) Rules, 1955

[9] Rule 6.1.1, Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002

[10] Rema Nagarajan, Law to Punish Pharma firms that Bribed Doctors languishing since 2015, (June 26, 2020) https://timesofindia.indiatimes.com/india/law-to-punish-pharma-firms-that-bribed-doctors-languishing-since-2015/articleshow/63913702.cms

[11]Himani Chandna, PM Modi warns pharma companies not to bribe doctors with women, foreign trips and gadgets, (June26, 2020)

https://theprint.in/health/pm-modi-warns-pharma-companies-not-to-bribe-doctors-with-women-foreign-trips-and-gadgets/347805/?amp

Disclaimer: This Note is for general information only and not intended for solicitation. Please do not treat this as a legal advice of any sort. Views contained in this, are personal with interpretive value of the author and teams assisting the author. Readers are encouraged not to rely solely on these contents before making any decision.

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