Posted on

New portal for medical devices registration in India (NSWS)

On January 01, 2024, India’s medical device regulator, Central Drugs Standard Control Organization (CDSCO) issued a notice that applications for certain medical device related regulatory approvals will not be accepted on the current medical devices CDSCO portal (CDSCO MD-Online portal) after January 15, 2024. Instead, they will be accepted through the National Single Window System (NSWS) portal only.

This transition is being implemented in stages. In the first phase, medical device related regulatory applications which are described below in this article will be accepted through NSWS portal. In future all medical device related regulatory applications will be accepted and filed through the NSWS portal only.

What is NSWS portal?

The NSWS portal is a digital platform established by the Indian Government with the aim to act as a single window for all the approvals. The portal enables the investors (manufacturers, importers, traders etc.) to obtain registrations and approvals according to their business requirements.

Which medical devices approvals could have been obtained through NSWS portal prior to January 01, 2024?

Importers and manufacturers of medical devices were previously able to use NSWS portal to make application for legal metrology registration, wireless planning and coordination wing’s (WPC) equipment type approval (ETA), import export code (IEC), etc.

Going forward, which medical devices related regulatory applications will be accepted through NSWS portal only?

From January 15, 2024, the list of medical device applications which will be accepted through NSWS portal are as follows:

  • Application for license to import medical devices for the purposes of clinical investigations or test or evaluation or demonstration or training (Form MD-16).
  • Application for license to manufacture medical device for purpose of clinical investigations, test, evaluation, examination, demonstration, or training (Form MD-12).
  • Application for grant of certificate of registration of a Notified Body (Form MD-01).

Is there any guidance for the filing of applications for approvals on NSWS?

There is a user manual for the submission of the applications through the NSWS portal which has been made available by the Indian Government.

What happens to the applications that have been filed before January 01, 2024?

The medical device regulatory applications which were filed before January 01, 2024, through CDSCO MD-Online portal will be processed on the same portal. The medical device regulatory applications that are identified above should not have been filed after January 01, 2024, on CDSCO MD-Online portal. Importers and manufacturers of medical devices will not be able to use CDSCO MD-Online portal for filing regulatory application identified above after January 15, 2024.

Which medical device regulatory applications will be accepted through CDSCO MD-Online portal?

All applications excepting those described above, including applications for import and manufacture of medical devices will be accepted through CDSCO MD-Online portal until further notice.

Conclusion

The transition of certain medical device regulatory applications from CDSCO MD-Online portal to NSWS portal is a welcome development for the importers and manufacturers of medical devices because they will now be able to determine licences/approvals applicable to their business, apply for those approvals and track the status of their applications under one roof i.e. NSWS portal.

Posted on

India’s Central Pollution Control Board issues guidance and clarifications on E-Waste Management

Important clarification issued by India’s Central Pollution Control Board (CPCB) under E-waste Management Rules, 2022 for the importers of Electrical and Electronic Equipment (EEE) who are not required to comply with Extended Producer Responsibility (EPR) requirements.

India’s Central Pollution Control Board has issued a clarification under E-waste Management Rules, 2022 (EWM Rules) identifying importers of Electrical and Electronic Equipment (EEE) who are not required to be registered as Producers under EWM Rules and therefore do not need to fulfil Extended Producer Responsibility (EPR) obligations. Such producers are required to submit certain documents to Customs/Port authorities as a proof of submission of those documents to CPCB.

List of Producers that are not required to be registered are as follows:

1. Producers that are engaged in import of Electrical and Electronic Equipment (EEE) including their consumables, components and spare parts which are not listed in Schedule 1 of the EWM Rules.

2. Producers that are engaged in import of Electrical and Electronic Equipment (EEE) including their consumables, components and spare parts which are listed in Schedule 1 of the EWM but are imported exclusively for the purpose of

a. selling to Producers that are already registered on the E-waste portal.
b. Self-use (Not for sale purpose)
c. Captive consumption for manufacturing and selling to producers already registered on EPR portal.

3. Consumers or bulk consumers who import EEE for self use and captive consumption are required to submit a self-declaration to Customs/Port authorities and submit copy of submitted self-declaration to Central Pollution Control Board.
Source: bit.ly/42kj9Bq

Important clarifications issued by Central Pollution Control Board w.r.t. Extended Producer Responsibility (EPR) compliances under E-waste Management Rules, 2022.

India’s Central Pollution Control Board (CPCB) has released certain notices and guidance document under E-Waste (Management) Rules, 2022 which have a significant impact on EPR obligations. A summary of these notices and guidance is reproduced below:

1. A fee structure has been introduced for the first time for registration of Recyclers, Refurbishers & Manufacturer, and annual maintenance charges have been prescribed for all registered stakeholders.

2. A new set of Frequently Asked Questions (FAQs) have been released which provide insights on sound management of E-waste, registration on E-Waste EPR Portal and fulfillment of EPR obligations.

3. Producers of E-waste will now have to first raise a purchase demand on registered Recycler or Refurbisher to purchase EPR certificate as per the recycling or refurbishing targets given by CPCB, without which the registered Recyclers or Refurbishers will not be able to transfer EPR credits to the Producers on the online EPR portal. Producers will not be able to meet EPR target for the FY 2023- 2024 if purchase demand is not raised.

4. All the registered Recyclers have been directed to recycle the e-waste available with them and generate EPR certificates for subsequent sales to Producers. All registered Recyclers have also been directed to transfer credits to Producers whenever purchase demand has been raised by the Producers, and not hold onto EPR credits.

5. Producers have been directed to fulfill their E-waste EPR obligations by purchasing EPR certificates for the FY 2023-2024 by 31st March, 2024.

6. Producers have been directed to submit their Annual and Quarterly returns by 31st April, 2024 for FY 2023-2024 as stipulated in the E-waste Management Rules, 2022.

Important Links
1. FAQ for E-waste: bit.ly/3HHuiCU
2. Fee Structure for registration for Recyclers: bit.ly/3SpMBkS
3. Notice for Producers: bit.ly/48XXFwK
4. Notice for Recyclers: bit.ly/48XhbJK

Posted on

Timelines for obtaining import license for medical devices including IVD’s in India

The import of medical devices including in-vitro medical devices (hereinafter referred to as “medical devices”) in India is regulated by India’s central medical device regulator, the Central Drugs Standard Control Organization (CDSCO). In order to import a medical device into India, the importer has to make an application for import license Form MD-14 of Medical Devices Rules, 2017 (MDR, 2017) before CDSCO. Once the application is processed successfully, the CDSCO grants an import license to the importer in Form MD-15 of MDR, 2017.

Since 1st April 2020, all medical devices (including its accessories and components) are regulated as drugs in India. An import license has been made mandatory to import medical devices depending on its risk classification from the following dates:

  • For Class A and Class B medical devices: 1st October 2022
  • For Class C and Class D medical devices: 1st October 2023

In the paragraphs below, we have answered some of the common questions regarding timelines for obtaining import license for medical devices on the basis of our working knowledge of the law and prevailing practice.

1.  What is the usual time within which an import licence may be granted by CDSCO?

The prescribed timeline for issuance of import license is nine (09) months from the date of application. However, the timeline is suspended if a query on the application is raised by CDSCO.

2. What is the approximate timeline for receiving query from CDSCO on the import license application?

As per current estimate, a query is typically received within a span of 3-4 months from the date of import license application. Please note that CDSCO may raise multiple rounds of queries.

3. How much time does an applicant of import license gets to reply to the queries?

The general expectation of CDSCO is that the queries should be responded within forty-five days from the date of receipt of queries.

4. What happens if a query cannot be responded within 45 days?

If the applicant is facing a difficulty in replying to the query, an intimation may be sent to CDSCO justifying the reason for delay and providing appropriate undertaking.

5. What is the maximum time within which queries have to be responded?

There is no official time limit for responding to the queries which has been stipulated by CDSCO. However, the expectation is to respond to the queries within the reasonable time frame.

6. What is the timeline by which the response to the queries is processed by CSDCO?

There is no prescribed timeline for processing the queries by CDSCO. However, the timeline for grant of import licence is nine (09) months from the date of filing of the application.

7. Is the time taken by the authorities to grant an import licence includes the time taken by the importer to respond to the queries?

No. The total timeline of nine months prescribed for grant of import license is not inclusive of the time taken by the importer to respond to the queries.

8. What is the time limit in which the importer can appeal to the Central Government in case the application is rejected by CSDCO?

If the application is rejected by CDSCO, the applicant may appeal to the Secretary, Ministry of Health and Family Welfare within a period of forty-five days. The Secretary or another officer designated by the Secretary may, after conducting an enquiry into the matter as considered necessary, pass orders in relation to the appeal within a period of ninety days from the date of appeal.

9. What is the validity of import license granted in Form MD-15?

The licence granted by CDSCO under Form MD-15 is valid in perpetuity unless cancelled or surrendered. The validity of the license so granted is subject to the payment of the retention fee by the importer.

10. When is importer license retention fee due to be paid?

The retention fee to retain import license has to be paid by the importer every 5 years.

11. What if the importer of medical device fails to pay the retention fee within the prescribed time period?

If the import licence holder fails to pay the required retention fee on or before the prescribed due date, the license holder is required to pay a late fee in addition to the retention fee.

The late fee will be calculated at the rate of two per cent (2%) of the import license retention fee for every month or part thereof within ninety days. Non-payment of fee until expiry of ninety days will result in cancellation of the import license.

For any business-related queries please write to contact@arogyalegal.com

Posted on

TOP 5 HEALTH LAWS & POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Doctor’s failure to co-operate with Drug Administration in disclosing name of manufacturer of drugs found in his possession is unlawful, but does not warrant imprisonment if the quantity is not large: Supreme Court
The Supreme Court of India has held that every person, including a registered medical practitioner (RMP), is required to disclose the name of the manufacturer of medicines found in his or her possession. A failure to disclose may result in imprisonment or fine. However, if the quantity of the drugs is smaller, and if the person is a RMP, imprisonment may not be warranted.
Source: bit.ly/3UDHZur

Ministry of Commerce and Industry rejects data exclusivity in the interest of domestic generic drug industry
India’s Ministry of Commerce and Industry has rejected the demand of European Free Trade Association (EFTA) for data exclusivity in the course of negotiating a free trade agreement, on grounds that it would affect the interests of the domestic generic drugs industry. If India were to accept data exclusivity provisions, then generic manufacturers of pharmaceutical drugs would not be allowed to leverage clinical trial data of innovator companies for securing marketing approvals.
Source: bit.ly/4bT7E8L

High Court not inclined to interfere in age limit for surrogacy
The Delhi High Court while hearing a plea challenging the age limit on surrogacy procedures, opined that the age limit to undergo surrogacy has been prescribed by scientific procedures and that it is not inclined to interfere in scientific matters. Currently, women between the age of 23 and 50 are permitted to undergo Surrogacy.
Source: bit.ly/4bEFNZw

EU’s Artificial Intelligence law one step closer to finalization
EU’s Internal Market and Civil Liberties Committees of the European Union have formally accepted The Artificial Intelligence Act. The Act lays down rules on artificial intelligence to establish a comprehensive code of rules on design, development, importation, marketing and use, as well as the use of artificial intelligence in the European Union. The said Act is scheduled to be tabled before the European Parliament in April 2024. It will be fully applicable 24 months after entry into force.
Source: bit.ly/3UIiOqn

EU to make new rules for validating green claims
EU’s Internal Market and Environment Committees have formulated draft rules for approving environmental marketing claims so that Companies can avoid being fined for greenwashing i.e. making false environmental claims. The draft rules will now be put to a vote at an upcoming plenary session of the European Parliament.
Source: bit.ly/3UGFLKE

Posted on

TOP 5 HEALTH LAWS & POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Central Drug Regulator to have open-door meetings with Industry twice a week
In a first, perhaps anywhere in the world, India’s top officer in the Drug Regulator’s office, the Drugs Controller General of India (DCGI), has announced that there will be walk-in meetings for the industry every Tuesday and Thursday between 5 and 6 pm, where industry can present its problems and suggestions directly before the officer. The move is aimed at improving Ease of Doing Business in India.
Source: bit.ly/48k9MmX

Waiting for Drug Price Regulator to fix retail prices of new drugs before they can be launched will adversely impact industry
An association of pharmaceutical manufacturers has reportedly submitted an appeal before the Drug Price Regulator, National Pharmaceutical Pricing Authority (NPPA), to recall its notice which directs drug manufacturers to delay launch of new drug until the retail prices of those products have been fixed and notified by NPPA. The association has submitted that notice will negatively impact drug manufacturers’ businesses and cause significant losses.
Source: bit.ly/48cUJvf

Regulatory Data Exclusivity on negotiation table between India and Europe during FTA talks
As per media reports, European Free Trade Association has demanded regulatory data exclusivity for drugs during the discussion on proposed Trade and Economic Partnership Agreement. If India accepts the demand, then Indian domestic drug manufacturers will not be able to rely on clinical trial data of innovator drug manufacturer for obtaining regulatory approvals in India, thereby impacting cost and timelines for generic drugs entry in Indian market.
Source: bit.ly/3T01NHe

Insurance Regulator has proposed to increase free-look time for insurance policies from 15 days to 1 month
As part of the recently published draft IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, the Insurance Regulator (IRDAI) has proposed to increase the free-look time for insurance policies from 15 days to 1 month. The free-look time is the time by which a policy holder of an insurance policy can cancel an insurance policy after purchasing it without liability to him.
Source: bit.ly/3T1PcDr

New York City has sued major social media companies for affecting mental health of youth and children
The New York City Mayor has announced that his administration has sued major social media companies on ground that they have intentionally designed platforms to purposefully manipulate and addict children and teens to social media applications.
Source: bit.ly/3OLyZPY

Posted on

TOP 5 HEALTH LAWS & POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

New Departmental Guidelines for sampling of Spurious Drugs, Medical Devices and Cosmetics Published
India’s apex regulatory body for drugs, medical devices and cosmetics, the Central Drugs Standards Control Organization, has published revised sampling guidelines for inspectors to follow in various states. All inspectors are required to collect at least 9 samples of drugs, and 1 sample of cosmetic or medical device in each month. The inspectors are supposed to be alert about feedback received from citizens and doctors in deciding which drugs, cosmetics and medical device brands they ought to sample and test for compliance with laws.
Source: bit.ly/3SDnLym

Social Media companies asked by High Court to handover details of persons who fraudulently operated certain accounts and channels
The Delhi High Court has ordered major social media companies including Facebook and Telegram to disclose identities of users accused of misusing trademark of major venture capital firm to cheat users by soliciting bogus investments. The court has also ordered concerned social media companies to provide details on action they will take to prevent further violation.
Source: bit.ly/3HXkxAP

WhatsApp and emails may be used to send legal notices for demanding unpaid amounts: High Court
The Allahabad High Court has reiterated that notice in cheque bounce case sent by WhatsApp or e-mail will be considered valid notice for the purposes of recovery under The Negotiable Instruments Act, 1881, and it will be presumed to have been dispatched and served on the same day.
Source: bit.ly/48f8Xf6

Popular Party Drugs added to list of Psychotropic Substances
The Indian Government has added popular synthetic party drugs, ADB-BUTINACA, Alpha-PiHP and 3 Methylmethcathinone (3-MMC), to list of psychotropic substances and notified small and commercial quantity of these substances for the purpose of fixing quantum of punishment for unlawful possession. Possessing psychotropic substances without permission or prescription is an offence under Narcotic Drugs and Psychotropic Substances Act, 1985.
Source: bit.ly/48ghuhM

WHO recommends antibiotics which should be exclusively put to human use to reduce chance of antimicrobial resistance
The World Health Organization (WHO) has updated its Medically Important Antimicrobials for Human Use (WHO MIA List), and reclassified antimicrobial drugs on basis of potential impact on human heath to limit the use of identified antimicrobials in other populations such as in plants and animals. The WHO hopes that reducing use of critical antimicrobial drugs in other population will reduce pace of antimicrobial resistance.
Source: bit.ly/49eVll9

Posted on

TOP 5 HEALTH LAWS & POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Human Rights body to probe sale of drugs with identical brand names in India
The National Human Rights Commission (NHRC) in India has taken suo motu cognizance of a newspaper report which stated that many drugs in India were being sold with identical brand names for treating different medical conditions. NHRC has issued notice to Secretary, Ministry of Health and Family Welfare and Central Drugs Regulator, asking for detailed report within four (04) weeks.
Source: bit.ly/3SB8WfB

India’s Environment Regulator to take action against unregistered recyclers and refurbisher of battery waste
India’s Central Pollution Control Board (CPCB) has issued direction to all State Pollution Control Board (SPCB) and Pollution Control Committees (PCCs) to ensure compliance with Battery Waste Management Rules, 2022 by recyclers and refurbishers of battery waste. CPCB has directed SPCB/PCC to carry out drives identifying informal / illegal battery waste recyclers, and physically verify facilities of existing waste recyclers. All battery waste recyclers and refurbishers are obligated to register under Battery Waste Management Rules, 2022.
Source: bit.ly/3OGJTGI

Difference of manufacturing process will not take away ability of manufacturer of product manufacturer to enforce product patent, if the product is covered by Product-by-Process Patent: High Court
The Delhi High Court of India has held that a product-by-process patent would be enforceable even if the alleged infringement relates to manufacturing of a product using process which is different than the one claimed in patent. The High Court was dealing with a matter relating to manufacture of a compound called Ferric Carboxymaltose (FCM) which was patented by the Innovator. The defendants had raised an argument that they are not covered by the patent because they were following a different process to manufacture FCM. However, the argument was rejected by the High Court.
Source: bit.ly/3OGtr9C

Manufacturers of medical devices who do not wish to disclose name and address of manufacturing facility, may apply for neutral code on central portal
The Indian medical devices regulator, Central Drugs Standard Control Organization (CDSCO) has direct all the manufacturers of medical devices for export purposes to submit the applications for neutral code through online system of medical devices portal only. If a neutral code is declared on the label of package, it does not have to bear the name and address of the manufacturer. The online portal is now functional to accept the applications.
Source: bit.ly/3SWgTxn

Recommendations for COVID legislation received from Law Commission of India
The Law Commission of India has submitted its report titled “A Comprehensive Review of the Epidemic Diseases Act, 1897″ to the Government of India. The commission has recommended either to amend the existing law or enact the new legislation to address the underlying gaps in the Epidemic Diseases Act, 1897. The 1897 was relied on by the Government of India to introduce various controls during the COVID pandemic, including lock downs.
Source: bit.ly/3SWMdMm

Posted on

Top 5 Health Laws & Policy Updates

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Innovator Pharma Company questions biosimilar trial on ground of non-procurement of comparator drug from authorized sources
A multinational pharmaceutical company has questioned the veracity of a biosimilar drug trial before India’s clinical trial regulator, The Drugs Controller General of India (DCGI), on grounds that the comparator drug, a biologic, was not procured from authorized sources, thereby putting clinical trial subjects at risk and casting shadow over appropriateness of the clinical trial.
Source: bit.ly/49tJmjj

Indian IPR regime well-equipped to handle AI generated works and there is no proposal to amend the law in context of AI generated content: Ministry of Commerce & Industry
India’s Minister of Commerce & Industry, while replying to a question in India’s parliament, has clarified that user of Generative AI should obtain permissions of owner of original copyrighted work processed by Generative AI technology before using the AI generated content for commercial purposes. The Minister further clarified that there is neither any proposal to create any separate right nor to amend the law in the context of AI-generated content.
Source: bit.ly/48cK4R8

Guidelines to distinguish nutraceuticals and drugs which have same or similar composition soon
The Indian Government has reportedly formed a high-level committee to address complaints that products which have identical or similar compositions are being approved as nutraceuticals, drugs or ayurvedic formulations, depending on the regulatory pathway chosen by the manufacturer. Under the current law, nutraceuticals are not permitted to make claims of treatment or cure on the label, however there are reports of non-compliance with this requirement.
Source: bit.ly/49bvaMb

Preparing a list of unvaccinated employees does not amount to violation of privacy: Madras High Court
India’s Madras High Court has held that the action of preparation of list of employees who have not received COVID-19 vaccinations and subsequent circulation of such list amongst employees of company would not amount to violation of privacy. The High Court was hearing a criminal complaint filed by an employee of the Company under Information Technology Act, 2000 on grounds that the Company had breached the said law sharing his personal information as part of list of unvaccinated employees.
Source: bit.ly/42yExmP

Couples seeking surrogacy on medical grounds are able to use donor sperm or egg, in spite of law to the contrary, by approaching a High Court
Following the precedent set by Supreme Court, the Bombay High Court has permitted two couples to use donor eggs for surrogacy owing to medical issues faced by the Couple. The development is important because The Surrogacy (Regulation) Rules, 2022 explicitly prohibits the use of donor gametes for surrogacy. In the past, Karnataka High Court has also granted similar reliefs to a couple facing medical challenges to conceive using own gametes while seeking a surrogate to deliver the baby.
Source: bit.ly/42yczHP

Posted on

Daily Health News Wrap – 01 Feb 2024

01 Feb 2024

Important clarifications issued by Central Pollution Control Board w.r.t. Extended Producer Responsibility (EPR) compliances under E-waste Management Rules, 2022.
India’s Central Pollution Control Board (CPCB) has released certain notices and guidance document under E-Waste (Management) Rules, 2022 which have a significant impact on EPR obligations.
Sources: –
FAQ for E-waste: bit.ly/3HHuiCU
Fee Structure for registration for Recyclers: bit.ly/3SpMBkS
Notice for Producers:  bit.ly/48XXFwK
Notice for Recyclers: bit.ly/48XhbJK
Important clarification issued by India’s Central Pollution Control Board (CPCB) under E-waste Management Rules, 2022 (EWM) for the importers of Electrical and Electronic Equipment (EEE) who are not required to comply with Extended Producer Responsibility (EPR) requirements
India’s Central Pollution Control Board has issued a clarification under E-waste Management Rules, 2022 (EWM Rules) identifying importers of Electrical and Electronic Equipment (EEE) who are not required to be registered as Producers under EWM Rules and therefore do not need to fulfil Extended Producer Responsibility (EPR) obligations. Such producers are required to submit certain documents to Customs/Port authorities as a proof of submission of those documents to CPCB.
Source: bit.ly/42kj9Bq
Indian Government extends the deadline for application of quality control order for certain drugs
Indian Central Government has extended the dates of applicability of Quality Control Orders (QCO) of Morpholine, Acetic Acid, Methanol and Aniline to 1st August 2024, 3rd August 2024, 3rd August 2024 and 3rd August 2024 respectively.
Source: bit.ly/48XokK3
Indian Government extends timelines for submission of application under Production Linked Incentive (PLI) scheme
The Department of Pharmaceutical under the Indian Ministry of Chemicals and Fertilizers has extended the timeline for medical device manufacturing companies to submit the application under the Production Linked Incentive (PLI) Scheme till the end of February 2024. The PLI scheme aims to promote domestic manufacturing of class B medical devices.
Source: bit.ly/47Y4UDx
New Guidelines for effective performance of Environment Regulators issued by Supreme Court of India
The Supreme Court of India has recently issued stringent guidelines which ensure the efficient functioning of environmental protection authorities and the enforcement of environmental regulations across the country. The court also upheld the reconstitution of the Central Empowered Committee (CEC), which is tasked with compliance with judicial orders pertaining to environmental conservation.
Source: bit.ly/3SFwscs
Posted on

Rounding-off Principles for Drugs and Medical Devices under Drugs (Prices Control) Order, 2013

In this article, we have discussed rounding-off principles that manufacturers and importers of drugs and medical devices should follow while determining the maximum retail price (MRP) of their products.


What is rounding-off?
Rounding-off refers to adjusting a fractional price of a drug or medical device to the nearest rupee, or the nearest paisa, depending on the context.


Why is rounding-off relevant for drugs and medical devices?
The MRP of drugs and medical devices is regulated by a law called the Drugs (Prices Control) Order, 2013 (“DPCO”). If a manufacturer or importer decides to round-off the MRP of a drug or medical device for any reason, for example, pursuant to an increase or decrease in applicable taxes, and the rounding-off is not acceptable as per provisions of DPCO, then it may result in recovery of the overcharged amount from the manufacturer or importer.


What are the principles of rounding-off prescribed under DPCO?
The DPCO itself is, as such, silent on the rounding-off of MRP. However, the authority responsible for enforcement of the DPCO, the National Pharmaceutical Pricing Authority (NPPA), has recognized the fact that rounding-off of MRP is an acceptable market practice [NPPA Minutes, 2016]. It is acceptable to NPPA that rounding-off of MRP is done as per ‘general mathematical practice’.


What is the general mathematical practice of rounding-off?
The general mathematical practice is to round-off the second decimal place of the MRP, depending on the number present at the third decimal. If the number present at the third decimal place is 5 or bigger than 5, then the number present at the second decimal place may be increased by 1. If the number present at the third decimal is less than 5, then the number present at the second decimal place will not change.
Some illustrations:

S No.Actual FigureRounded-off Figure
1.Rs. 123.45/-Rs. 123.45/-
2.Rs. 123.455/-Rs. 123.46/-
3.Rs. 123.456/-Rs. 123.46/-
4.Rs. 123.991/-Rs. 123.99/-
5.Rs. 123.999/-Rs. 124.00/-
6.Rs. 123.001/-Rs. 123.00/-
7.Rs. 123.111/-Rs. 123.11/-


The above understanding was validated by the Delhi High Court in the case of Union of India v Bharat Serums.


Whether rounding-off is permitted for medical devices under Legal Metrology (Packaged Commodities) Rules, 2011?
The MRP of medical devices is regulated by DPCO as well as Legal Metrology (Packaged Commodities) Rules, 2011 (“LMPC Rules”). Until 23.6.2017, the LMPC Rules had a provision to round off the fractional MRP to the nearest rupee. In other words, medical devices were permitted to round-off the fraction of less than fifty paise to the preceding rupees and a fraction of above 50 paise and up to 95 paise to the rounded off to fifty paise.
However, the above provision was omitted from LMPC Rules with effect from 1.1.2018. Therefore, the MRP of medical devices today cannot be rounded off, except in the case of the second decimal place, as described earlier.


Can a manufacturer or importer of medical devices round-off MRP of medical devices to the nearest rupee or 50 paise?
The simple answer is no, especially not after 2018. Before this, it was at least arguable that manufacturers and importers of medical devices could rely on the provisions of LMPC to take a position that they had the flexibility to round-off the MRP to the nearest rupee or 50 paise. The price regulator, NPPA, however, has not accepted this position. Post 2018, there is no basis for manufacturers and importers of medical devices to take such a position since the supporting LMPC provisions are now omitted.
Please note that manufacturers and importers of drugs could never take benefit of the flexibility of rounding-off under LMPC Rules for fixing MRP because LMPC Rules do not apply to drugs.


Conclusion
The flexibility to round-off MRP in the case of drugs and medical devices is available up to the second decimal place only, as per general mathematical practice. Any error in rounding-off for drugs and medical devices can result in significant recovery from manufacturers and importers under the provisions of the Drugs (Prices Control) Order, 2013.