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Medical Textiles (Quality Control) Order, 2023: Impact Analysis for Personal Hygiene Products

Introduction

The Government of India notified the Medical Textiles (Quality Control) Order, 2023 (the “Order”) on 27 September 2023. This Order, drafted by the Ministry of Textiles in consultation with the Bureau of Indian Standards (BIS) mandates that certain medical textile products adhere to specified Indian Standards (IS) and bear the Standard Mark. Medical textiles are mainly used for protection from infections in hospital environment, personnel hygiene, wound treatments, wound closure, replacement surgery or as a mechanical organ. In this article, we have covered the implications with focus on personal hygiene category which is largely unregulated. The Order applies to all manufacturers, wholesalers, retailers, and importers of finished products for sale and marketing in India.

Update in Standards

The Ministry of Textiles has introduced the updated standards with the Medical Textiles (Quality Control) Order, 2023. To comply with the Order, the manufacturer/producers of these products will have to get license from the BIS to use the Standard Mark on these products/their packaging to signify that the products meet with specified IS standards.

The Order covers the following products:

Sr. No.Product NameIS Number Title of Indian Standard
1. Sanitary NapkinsIS 5405:2019Sanitary Napkins – Specification (second revision)
2. Baby DiaperIS 17509:2021Disposable Baby Diaper – Specification
3. Reusable Sanitary, Pad Sanitary, Napkin Period PantiesIS 17514:2021Reusable Sanitary Pad/Sanitary Napkin/ Period Panties – Specification
4. Shoe CoversIS 17349:2020Medical textiles – Shoe Covers – Specification
5. Dental Bib/NapkinsIS 17354:2020Medical Textiles – Dental Bib or Napkins – Specification
6. Bedsheet and Pillow CoverIS 17630:2021Medical Textiles – Bed Sheet and Pillow Cover – Specification

The standards in the Order do not apply to the goods or article meant for export or those that are manufactured by Self Help Groups. For others, these standards are slated to become effective from 01 April 2024 (the “Effective Date”), except for Small and Micro Enterprises (SMEs). The effective date for SMEs is 01 October 2024. Consequently, the industry will transition from the previous framework of standards to the updated framework commencing from the Effective Date. This transitional period provides the industry with approximately five months to make requisite preparations for the shift in compliance standards.

Impact on the Industry

Mandatory Licensing and Certification: Manufacturers need to be aware that compliance with the Medical Textiles (Quality Control) Order, 2023 requires obtaining a license and adhering to an elaborate certification process. The process is guided by Scheme I of the Bureau of Indian Standards (Conformity Assessment) Regulations, 2018 (the “Conformity Assessment Regulations”). This makes it a mandatory certification for using BIS mark on medical textiles products. All manufacturers of these products will require to initiate the licensing process promptly, recognizing that it is not optional but an essential compliance step.

The licensing process entails scrutiny of the production process by the Bureau of Indian Standards. This involves factory visits, review, and adherence to precise labelling and marking requirements. Manufacturers will have to allocate resources and manpower for the continuous compliance checks that accompany the licensing process. Furthermore, it is vital to establish protocols for maintaining compliance and documentation for potential audits and renewals.

Certification for Foreign Manufacturers: Foreign manufacturers are also required to comply with the standards for the products covered under the Order. For such foreign manufacturers, the BIS operates the Foreign Manufacturer Certification Scheme (FMCS), which is covered under the Scheme I of the Conformity Assessment Regulations. The FMCS is a scheme under which the manufacturers who have their factory location outside India can apply to get BIS licence in accordance with the BIS Act, 2016 and Conformity Assessment Regulations. The BIS license under the FMCS scheme ensures that the product of the foreign manufacturer sold in India conform to the applicable Indian Standards. Considering that there is approximately only five (5) months’ time before the updated standards become effective, foreign manufacturers may have to work on war footing to meet the timeline and be prepared with the updated products in time. However, as per the Frequently Asked Questions (FAQs) hosted on the BIS website, the average time taken for grant of licence is generally six (6) months from the date of receipt of complete application and its recording. It may further vary for reasons like delay in response to queries raised, organizing inspection(s), transportation of samples and remittance of dues, etc. Thus, it is of high importance for foreign manufacturers to initiate the licensing process from their end at the earliest to introduce compliant products in Indian market by the Effective Date.

Limited Time for Transition: With the updated standards slated to come into effect from April 2024, the industry has a finite window of approximately five months to prepare for compliance. Similar to foreign manufacturers, for entities lacking the requisite licenses, this timeframe becomes a pressing concern. It is crucial to understand that the certification and licensing process for domestic manufacturers, encompassing document preparation, verification, on- site inspections, and reviews, typically spans between four to six months (as per the FAQs on the BIS website). Consequently, early initiation of the process is important to meet the compliance deadline. After 01 April 2024, products that do not possess the BIS license for conforming to the updated standards will not be permitted to be sold in India, highlighting the urgency of proactive compliance.

Import of the Products: Importers of medical textile products also face a compliance challenge under the Medical Textiles (Quality Control) Order, 2023. These importers (not being the foreign manufacturer) must ensure that the products they bring into India meet the specific Indian Standards and carry the requisite Standard Mark. This means that from the Effective Date the imported products must adhere to the same quality and safety benchmarks as those produced within India. To meet this end, importers will need to establish close collaboration with their international suppliers (foreign manufacturers) to ensure that these products are in

line with the standards outlined in the Order and are licensed under the FMCS when they reach the Indian custom barrier.

Additional Compliances: The conformity to one BIS Standard may also require conformity to other BIS Standards. Manufacturers should recognize that compliance with the new standards goes beyond the finished product; it extends to the raw materials, manufacturing process, testing capabilities as well. For instance, the BIS standard for sanitary napkins (IS 5405:2019) mandates that if cotton gauze is used as a raw material, it must conform to IS 758. Further, the testing of the products (by the testing facilities of the manufacturer) also requires adherence to various IS Standards; for instance, the test to ascertain the pH value of the products must adhere to IS 1390, which will require equipment and facilities that can correctly and accurately test products as per IS 1390. These additional compliance implications may translate to increased time and costs for the manufacturers.

Balancing Inventory: Managing existing inventory compliant with older standards also presents a challenge. Manufacturers must strike a balance between maintaining a consistent supply in the market until they secure the necessary licenses and utilizing the existing inventory. It is advisable to develop a phased inventory management plan, ensuring that obsolete stock does not remain on the market after the Effective Date. This may involve strategically phasing out non-compliant items till the Effective Date or till the license is obtained.

Implications for Hospitals: The implications of the Medical Textiles (Quality Control) Order, 2023 reach into the healthcare sector, presenting a significant challenge for hospitals. With the Order mandating specified standards for medical textiles, including bed sheets, pillow covers, shoe covers, and dental bibs, hospitals will face the task of sourcing compliant products during the transition phase. This challenge is compounded by the short timeline. As the licensing process itself spans four to six months, and the effective date is just five months away, a shortage of compliant products may emerge. This scarcity could lead to unavailability of these products, affecting public health as hospitals grapple with maintaining essential inventory that adheres to the updated standards while the industry transitions.

Quality Standards in Public Interest

The issuance of the Medical Textiles (Quality Control) Order, 2023, also carries a broader societal impact. It serves the purpose of upholding stringent quality standards, particularly in contexts where these products play a pivotal role. A notable instance can be found in the welfare initiatives implemented by various state governments in India, where sanitary pads are distributed to schoolgirls as part of their welfare schemes. Historically, the procurement of these products sometimes involved the selection of agencies that imported substandard, low- quality items from foreign countries, often at significantly reduced rates. Such practices occasionally led to the circulation of products that circumvented established quality norms.

However, the enforcement of the BIS-mandated Standard Mark now provides an unequivocal assurance that even products disbursed through welfare programs strictly adhere to meticulously defined quality criteria. This safeguard upholds the health and well-being of the beneficiaries and aligns with the overarching objective of elevating the overall quality of life.

Conclusion

The Medical Textiles (Quality Control) Order, 2023, combined with the BIS Act and Conformity Assessment Regulations, marks a significant stride towards ensuring the safety and quality of medical textiles in India. By making the BIS license mandatory, the Order raises the bar for manufacturers and importers of the medical textile products and reassures the consumers.

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Regulation of Artificial Intelligence in India: Scope of new advisory issued by Indian Government and assessment of impact on businesses

The Ministry of Electronic & Information Technology (MeitY) has recently issued an advisory which has the potential to regulate businesses that are using Artificial Intelligence (“AI”) models developed by them or third parties. In this article, we have analysed the scope of advisory, specifically to evaluate what compliance burden does it cast on businesses, and more importantly – which businesses are impacted, and which aren’t.

Brief background

All intermediaries in India must remain compliant with Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules) if they don’t want to risk the loss of statutory immunity (read safe harbour protection) granted to them. If an intermediary loses safe harbour, it may be made responsible for any and all illegal activities that takes place on its platform. MeitY has the powers to make and amend the IT Rules, and it is in relation to exercise of such powers, that it has issued the current advisory.

An intermediary, for the purposes of IT Rules, is essentially any person or entity that receives, stores, or transmits particular electronic records on behalf of another, or provides any services in relation to the particular electronic record.

Due to the wide nature of the above definition, all internet service providers, telecommunication service providers, web hosting service providers, data centres, search engines, online marketplaces etc. are regulated as intermediaries in India.

Scope of the advisory – What compliances does it prescribe?

The advisory essentially introduces three new compliances in relation to AI models, Large Language Models(“LLMs”), generative AI, software(s) and algorithm(s) (together “AI”): (a) AI should not exhibit any inherent bias or discrimination; (b) if the AI is under-tested or unreliable, then its availability to Indian users can take place only with an explicit permission of the Government of India, along with a declaration which indicates that the output may be unreliable; and (c) if the AI is capable of generating information, audio and/or video, which may be potentially used as misinformation or deepfakes, then a permanent label, metadata or identifier should be embedded in the output which identifies the computer resource from which such misinformation or deepfake was created or originated, as well as any other computer resource that modified or played a part in the misinformation or deepfake.

Scope of the advisory – Who does the advisory apply to?

Since the advisory has been issued in relation to IT Rules which apply to intermediaries, there is no doubt that the advisory is binding on the intermediaries.

Interestingly, the IT Rules do not regulate businesses who are using or leveraging AI in order to provide goods and services to end consumers. So, the real question is, does the advisory apply to any and all business that are developing or using AI capabilities?

From a plain reading of the advisory, it appears that the advisory does not directly apply to any and all businesses, if the businesses do not qualify as an intermediary. Most businesses developing or leveraging AI would not fall under the definition of an intermediary.

Unfortunately, the language of the advisory leaves room for other interpretations as well. One interpretation is that the advisory directs intermediaries, in their capacity as gatekeepers of information that is exchanged between businesses and consumers, to ensure that AI developed or leveraged by businesses is of a ‘standard’ quality (as defined in the advisory). Since internet service providers, search engines and web hosting service providers are all intermediaries under Indian law, the advisory may be viewed as an attempt by Government of India to indirectly control businesses that are developing or leveraging AI.

The Minister of IT, however, has clarified that the advisory is applicable to significant platforms only and not to start-ups. Unfortunately, there is no definition of significant platforms. Until further clarification is received, it may be safely assumed that only large platforms will be required to take explicit permission for using under-tested and unreliable AI whereas startups will not.

What changes now for businesses?

All intermediaries operating in India have to submit Action Taken-cum-Status Report (“ATS Report”) to the Ministry. It appears that all intermediaries have taken a conservative view of the advisory and are interpreting the advisory such that it applies only to intermediaries such as platforms (e.g. social media platforms). There is no clarity on the permission process from Government of India as of now.

We expect further clarity to be received in the coming days, once MeitY has reviewed the ATS Reports. Until then, it should be business as usual for most businesses other than those who qualify as intermediary under the IT Rules.

The most important thing for businesses to do as of now, is to evaluate whether the business qualifies as intermediary under IT Rules or not. If it qualifies as an intermediary, all the compliance burden associated with the advisory (described above) will immediately shift on the business.

All pragmatic businesses may consider starting preparations to introduce a permanent label, metadata or identifier in the output, as described above.

From a policy perspective, the advisory appears to be a clear declaration of intent by the Indian Government, that it is looking to regulate AI given its disruptive powers.

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Can Oral Contraceptive Pills be advertised in India?

Oral Contraceptive Pills (OCPs), also known as daily contraception pills or birth control pills are used to prevent pregnancy. However, these pills have their limitations and side effects. Given the use of OCPs, one would expect it to be widely advertised to the public in India. However, it is rare to come across an advertisement that freely advertises OCPs. Even, the label of such OCPs in itself does not indicate that it is intended to be used for the prevention of pregnancy in women after unprotected sex.

It is important to understand OCPs are different from Emergency Contraception Pills (ECPs). OCPs are taken regularly to prevent pregnancy. An ECP, on the other hand, contains a single active ingredient in high dosage and is taken once after unprotected sex to prevent pregnancy.

In this article, we have analysed the legal framework for the advertisement of OCPs in India and concluded that while there is a legal bar on the advertisement of OCPs, certain compositions and strengths of OCPs may be advertised.

Legal Framework for Advertisement of ECPs

There are two laws that regulate the advertisement of OCPs –the Drug Rules, 1945 (“Drugs Rules”) which bar the advertisement of prescription drugs, and the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (“DMRA”) which bar advertisement of a drug in terms which may suggest that it may be used for prevention of conception in women. However, both Drugs Rules and DMRA have certain exceptions, which we will discuss in the following paragraphs.

Exceptions under Drugs Rules for OCPs

There are certain compositions of OCPs that have been exempted from the requirement of being sold under a drug license, with the underlying intent there being that such compositions ought not be sold under a prescription of a registered medical practitioner (“Doctor”). We have reproduced the composition of these OCPs in the table below.

1. DL-Norgestrel-0.30 mg.
Ethinyloestradiol-0.03 mg.
2. Levonorgestrel-0.15 mg.
Ethinyloestradiol-0.03 mg.
3. Centchroman-30mg.
4. Desogestrel -0.150mg.
Ethinyloestradiol 0.030mg.
5. Levonorgestrel 0.1mg
Ethinyloestradiol 0.02mg

The above OCPs are clearly not prescription drugs, and therefore the bar on advertisement of prescription drugs would not apply to those OCPs.

Exception under the Drugs and Magic Remedies Act

The DMRA contains an enabling provisions through which the Central Government can restrict the scope of DMRA. In 1992, the Central Government notified a list of compositions of OCPs to which the restriction on advertisement under DMRA will not apply. We have reproduced the composition per tablet of these OCPs in the table below.

a. DL-Norgestrel- 0.30 mg.
Ethinyl Estradiol- 0.03 mg;
b. Levo-norgestrel- 0.15 mg.
Ethinyl Estradiol- 0.03 mg;
c. Centchroman- 30 mg.

Therefore, in so far as OCPs are concerned, only the below compositions of OCPs which are exempted under both Drug Rules and DMRA may be advertised in India, subject to certain basic compliance conditions and other informal guidance issued by Regulators from time to time.

1. DL-Norgestrel- 0.30 mg.
Ethinyl Estradiol- 0.03 mg;
2. Levo-norgestrel- 0.15 mg.
Ethinyl Estradiol- 0.03 mg;
3. Centchroman- 30 mg.

Past controversies

In 2008, a criminal complaint was filed against Cipla Ltd. and its Directors, a major pharmaceutical company, for the advertisement of contraception pill sold under the brand name ‘Ipill’, having a composition of Levonorgestrel IP-1.5 mg. In 2015, another criminal complaint was filed against Cipla Ltd. and its Directors, for the advertisement of another contraception pill having the same composition but bearing the brand name ‘EK Pill’. The grounds in both the complaints were the same, that Cipla Ltd. had violated DMRA by advertising contraception pill to indicate that it can prevent conception in women. Cipla filed a petition against the criminal complaints and prevailed in both the cases on grounds that it had been explicitly permitted by the Central Drugs Standards Control Organization (CDSCO) to advertise the drugs. It relied on a 1961 notification under DMRA, which allowed companies to advertise ECPs, provided they were approved by the Central Government (CDSCO).

Going forward

As indicated above, certain compositions of OCPs may be advertised. However, before advertising, it should be ensured that the advertisement meets the requirements of law and also guidelines that have been proposed by various authorities. For example, the advertisement should not be misleading. A violation of the law can result in criminal prosecution as well as cancellation of the manufacturing license.

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Draft Greenwashing Guidelines in India – Initial Understanding and Comments

The Indian consumer rights watchdog, Central Consumer Protection Authority (CCPA), has released the draft Guidelines for the Prevention and Regulation of Greenwashing, 2024 (the ‘Guidelines’) for public comments. The last date for providing public comments is 21 March 2024. The Guidelines aim to address the issue of unsubstantiated environmental claims made by businesses in their advertisements and communications. In this article, we will examine the scope of the Guidelines and their potential impact on current advertising practices.

What are the Greenwashing guidelines and what is covered by them?

India’s Consumer Protection Act, 2019 prohibits false and misleading advertisements. The CCPA has powers to penalize businesses that indulge in false and misleading advertisements. In fact, the CCPA has already published Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (the ‘Misleading Ad Guideline’). However, the Misleading Ad Guidelines are a general set of guidelines and identify what does not constitute a misleading advertisement, as opposed to what constitutes a misleading advertisement. Therefore, given the large incidence of environmental claims, a need was felt by CCPA to come up with a new set of guidelines to specifically address the issue of misleading advertisements relating to environmental claims. Accordingly, the CCPA has prepared the Guidelines to specifically cover all forms of advertisements relating to environmental claims which attempt to greenwash consumers.

The concept of ‘Greenwashing’ in context of environmental claims

The Guidelines define what is ‘greenwashing’ in context of environmental claims. To make an environmental claim means to make a representation of goods or services suggesting their environmental friendly attributes. For example, when a business advertises that use of its home cleaning liquid spray results in “eco-friendly home cleaning”, it is making an environmental claim for the purposes of the Guidelines.

Greenwashing, in context of environmental claims, is defined under the Guidelines as any deceptive or misleading practice that conceals, omits or makes false and unsubstantiated environmental claims.

So, in the example of home cleaning liquid spray, if the claim of “eco-friendly home cleaning” cannot be substantiated by the business, it would amount to greenwashing by the business.

To take another example, if a business claims that its product is made out of a certain percentage of recycled material, it is making an environmental claim, and if it cannot be substantiated by empirical data, it will amount to greenwashing for the purposes of the Guidelines.

It is also essential to note that the Guidelines borrow the definition of ‘advertisement’ from the Misleading Ad Guideline, which means statement made on the package label or wrapper of the product is covered by the scope of the Guidelines. Therefore, even a product label that makes environmental claims such as ‘sustainably procured’, ‘cruelty free’, etc., will be tested by the greenwashing parameters set out in the Guidelines.

How can businesses comply with the Greenwashing guidelines?

Make disclosures in support of environmental claims

As per the Guidelines, any business that makes environmental claims as part of an advertisement or label claim, by using terms such as ‘clean’, ‘green’, ‘eco-friendly’, ‘eco-consciousness’, ‘good for the planet’, ‘minimal impact’, ‘cruelty-free’, ‘carbon neutral’, ‘sustainable’, ‘organic’, etc. will have to substantiate it through an appropriate disclosure. The disclosure will have to contain verifiable evidence to support the environmental claim.

For example, an advertisement for an LED bulb claiming to be ‘the most energy-efficient LED bulb’ shot against the backdrop of a park with green grass and trees would qualify as an environment claim. It may amount to greenwashing if the claim of being the most energy-efficient cannot be substantiated or scientifically verified, and all such data and scientific test reports are not disclosed to the public.

The Guidelines permit businesses to disclose relevant information and data in support of the environmental claims by way of a QR code or a website link that may be part of the advertisement or the label.

Ensure claims are verified by an independent and recognized third party

While making specific claims such as carbon offsets, carbon neutral, non-toxic, ozone safe, etc., businesses will have to ensure that these claims are credible, scientific and verified by an independent third-party. For example, an air conditioner advertisement claiming to be ozone friendly will have to disclose the coolant it uses, its ozone depleting potential (ODP) and a report from an independent third-party verifying these claims.

Use easy to understand language for environmental claims

If an advertisement uses terms with technical connotations in environmental claims, it will be required to do so in consumer-friendly language explaining the meaning and implication of such technical terms. For example, if a cosmetic brand advertises that it has avoided 1 Mmt of carbon emissions in 2023, the advertisement will have to simplify and explain the meaning and implication of carbon emission and its avoidance.

Avoid cherry picking helpful data

The Guidelines also clarify that when a company intends to use any research data, it should do so in an unbiased manner without cherry-picking favorable observations. Therefore, if an advertisement relies on data from research conducted on four matrices and highlights one matrix from the research favoring it while omitting the other three unfavorable matrices, it will amount to greenwashing under the Guidelines.

What are the penalties if a business is found guilty of Greenwashing in India?

If any advertisement or statement containing environmental claims is found to be unsubstantiated, non-verifiable or otherwise contrary to the provisions of the Guidelines, it may attract imprisonment for a term extending to two (02) years and fine extending to ten lakh Rupees (INR 10,00,000). For every subsequent offence, the punishment may extend to imprisonment for up to five (05) years and a fine of up to fifty lakh Rupees (INR 50,00,000).

Are any environmental claims excluded from the scope of Greenwashing guidelines?

The Guidelines do not apply to obvious hyperbole, puffery and claims that are not specific to any product or service. For example, any statement by a company generally referring to its environmental goals or mission without substantiating it, or to its environmental initiative or achievements without disclosing their details, would not amount to greenwashing under the Guidelines, provided such statements are not related to its products or services.

Conclusion

The Indian Government has finally taken the first decisive step to counter the menace of greenwashing. Businesses in India should be prepared to face heightened scrutiny for every term and phrase they use which attributes environmental friendly character to its products and services. It may be prudent to invest resources now to review the Guidelines closely and take steps to align product and service advertisements and label claims with the Guidelines in order to avoid any issues when Guidelines are enforced, especially on account of the steep penalties.

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New NSWS Portal to obtain permission to import and manufacture new drugs for use in Clinical Trials in India

The India’s Central Drugs and Clinical Trial Regulator, The Central Drugs Standard Control Organization (CDSCO), has issued a public notice that it will no longer accept application for grant of permission to import or manufacture new drugs, unapproved active pharmaceutical ingredients (APIs) of new drugs, or investigational new drugs, which are to be used in laboratory tests or analysis or in domestic or global clinical trials conducted in India. Such applications, from 16th January 2024, will have to be made through the National Single Window System (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 applications for permission in relation to clinical trials will be accepted through the NSWS portal only?

From 16th January 2024, the below mentioned applications in relation to import and manufacture of unapproved APIs, new drugs and investigational new drugs will have to be filed through NSWS portal only:

  • Application for grant of permission to manufacture new drug or investigational new drug for clinical trial or bioavailability or bioequivalence study or for examination, test and analysis (Form CT-10).
  • Application for grant of permission to manufacture formulation of unapproved active pharmaceutical ingredient for test or analysis or clinical trial or bioavailability or bioequivalence study (Form CT-12).
  • Application for grant of permission to manufacture unapproved active pharmaceutical ingredient for development of formulation for test or analysis or clinical trial or bioavailability or bioequivalence study (Form CT-13).
  • Application for grant of licence to import new drug or investigational new drug for clinical trial or bioavailability or bioequivalence study or for examination, test and analysis (Form CT-16).
  • Also, an application for licence to import drugs for purpose of examination, test or analysis (Form-12) was also made live on NSWS portal from 24th January, 2024.

What will happen to the applications that were already filed on Sugam portal before 16th January 2024?

The above-mentioned applications that were filed on the Sugam portal will be processed through that portal only. Any new application post 16th January 2024 should be filed through NSWS portal only. The Sugam portal will be disabled for the filing of these applications after 10th February 2024

Is there any official guidance available to ease the new filings through NSWS portal?

A user guide for the filing of application through NSWS portal for the above-mentioned regulatory approvals is made available along with the notice.

What are the other applications which may be made through NSWS Portal?

On 1st January 2024, CDSCO issued a notice that certain medical device regulatory applications, including application for permission to import or manufacture medical device for clinical investigations, will not be accepted on the current medical device CDSCO portal (CDSCO MD-Online portal) after 15th January 2024. Instead, such applications will be accepted through the NSWS portal only.

For more details, please refer our article which covers this update: New portal for medical devices registration in India (NSWS)

Conclusion:

Sponsors of clinical trials, clinical research organizations (CROs), and various drug testing and analytical laboratories in India, which import unapproved APIs for testing and analysis, or for use in clinical trials, should take note of this very important development, in order to avoid any surprise which may impact the drug development and clinical trial timelines.

At a high-level, it is now clear that, in near future, CDSCO will transition all application forms for all pharmaceutical and medical device licenses and permissions to NSWS.

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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.

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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

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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

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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.

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PERMISSIBLE PRICE INCREASE AND CALCULATION OF OVERCHARGED AMOUNT UNDER DRUG PRICES CONTROL ORDER (DPCO)

DRUGS AND MEDICAL DEVICES PRICE INCREASE RESTRICTIONS

The Division Bench of the High Court of Delhi, in the case of Union of India v Bharat Serums, has laid down how the overcharged amount should be calculated by India’s drug price control regulator, National Pharmaceutical Pricing Authority (“NPPA”). The judgement will have a significant impact on existing as well as future demands for overcharging which are raised on pharmaceutical and medical device companies in India.

Background

Under Para 20 of India’s drug price control law, the Drug (Prices Control) Order, 2013 [“DPCO”], all non-scheduled formulations are allowed to increase their price by 10% in 12 months. Non-scheduled formulations are non-essential drugs or medical devices that are not listed in the schedule of DPCO. Most pharmaceutical and medical device companies do not use the 10% price increase opportunity in the 12-month period and elect to increase the price after a number of years.

When the opportunity does arise to increase prices, the question that always arises is whether the company can increase the price by the ‘aggregate’ of permitted percentage increase, or by a maximum of 10% from its last published Maximum Retail Price (MRP). For instance, if the MRP of a drug or medical device was Rs. 100, and the company selling the product decides to increase the price of the drug or medical device after a period of 5 years, would it be entitled to increase the price of the product by Rs. 50 (10% increase allowed every 12 months period), or by Rs. 10 (10% increase from last MRP irrespective of the time gap).

The other question that arises is if a pharmaceutical or medical device company increases the MRP of its product by more than 10% in a 12-month period, then how should NPPA recover the overcharged amount? For instance, if the MRP of a drug or medical device was Rs. 100 earlier, and if the company revises the MRP of the product to Rs. 200 after 5 years, how should NPPA calculate the overcharged amount? Should NPPA assume that the company was only allowed to increase MRP by 10% and recover the remainder amount as an overcharged amount? In other words, should NPPA give a concession of Rs. 10 to the company and proceed to recover Rs. 90, or should NPPA ‘assume’ that the company would have increased its price by 10% each year, and proceed to recover only the balance amount, in this case Rs. 50 (or more accurately Rs. 39 since a 10% increase every year for 5 years would have resulted in MRP of Rs. 161).

The above questions were conclusively answered by the Delhi High Court and are discussed below.

Interpretation of 10% permissible price increase in 12-month period

The Delhi High Court has interpreted the 10% allowance to increase MRP as follows: the MRP of non-scheduled formulations can only be increased by 10% in a period of 12 months, at a time, but in case of overcharging, the NPPA will have to assume that the company would have taken the 10% MRP increase and will be permitted to recover the ‘net’ amount.

The above interpretation is explained using examples in the paragraphs below.

Examples

What is permissible MRP increase for a pharmaceutical or medical device company?

If the MRP of a non-scheduled drug or medical device was Rs. 100 in 2014, the permissible price increase on yearly basis would be as follows:

Years01.01.201401.01.201501.01.201601.01.201701.01.201801.01.201901.01.2020
  Actual MRP100110121133.1146.41161.05177.15

If a pharmaceutical or medical device company wishes to take 10% increase after 5 years, how much can that be?

If the MRP of a non-scheduled drug or medical device was Rs. 100 in 2014, and the company decided to take a price increase in 2019, the maximum permissible price increase would be Rs. 110.

Years01.01.201401.01.201501.01.201601.01.201701.01.201801.01.201901.01.2020
  Actual MRP100100100100100110121

How should the overcharged amount be calculated, in the event of default by a pharmaceutical or medical device company?

In a hypothetical scenario, where the MRP of a non-scheduled drug or medical device was Rs. 100 in 2014, and the company decided to increase it to Rs. 161.05 in 2015 and later to 177.15 in 2020, the overcharged amount will have to be calculated as follows:

Years01.01.201401.01.201501.01.201601.01.201701.01.201801.01.201901.01.2020Total ovecharged amount
  Actual MRP100/-161.05161.05161.05161.05161.05177.15–
Permissible MRP (with 10% increase)Not applicable110121133.1146.41161.05177.15–
How NPPA calculated overcharging amount ? (Not legal)Not applicable51.0551.0551.0551.0500204.2
Overcharged amount as per Delhi High CourtNot applicable51.0540.0527.9514.6400133.69

The above table is instructive because it illustrates the incorrect methodology applied by NPPA to calculate the overcharged amount that has been routinely demanded and recovered by NPPA so far from pharmaceutical and medical device companies.

Until the Delhi High Court judgement, the NPPA demanded an amount which was excessive and incorrectly calculated (Rs. 204.2). However, after the Delhi High Court judgement, irrespective of the amount that has been calculated by the NPPA, the actual payable amount will be significantly lower than the amount demanded by NPPA (Rs. 133.69).

Impact

This particular Delhi High Court judgement on permissible price increase of drugs and medical devices will have a far-reaching impact on existing overcharging demands which have been raised by NPPA, and the demands that NPPA will raise in the future. All existing demands for overcharging raised by NPPA, which have been calculated using incorrect methodology due to incorrect interpretation of overcharging provisions of DPCO by NPPA, should be rolled back by the NPPA. A pharmaceutical or medical device company that has currently received such a demand should strongly object to the NPPA’s demand on the strength of the Delhi High Court judgement.

Pharmaceutical and medical device companies should also be careful in taking price increases for non-scheduled formulations in the future, and should not assume that they will be able to take an ‘aggregate’ price increase after a certain number of years if they haven’t availed the option to increase the price every 12 months.