The diagnostics industry is one of the fastest growing industry in India due to high prevalence of life style related diseases and infectious diseases. An important factor behind its stellar growth is that many insurance providers now offer coverage for diagnostic tests. The industry is expected to continue to record good growth since insurance penetration is increasing every year.

Most Important laws

  • The Medical Device Rules, 2017 regulate quality of in-vitro diagnostic kits and notified medical equipment such as CT-Scan, MRI Equipment, X-Ray machines, PET Equipment and prescribes a license requirement for import or manufacture of these medical devices in India.
  • The Atomic Energy Act, 1962 regulates all radiation emitting diagnostic equipment such as X-Rays and CT Scans and prescribes requirement of a license for manufacturers, suppliers and users of such equipment.
  • The Pre-Conception and Pre-Natal Diagnostic Techniques Act, 1994 prohibits foetal sex determination and prescribes strict registration requirements for radiologist who use sonography and other imaging techniques on pregnant women.
  • The Clinical Establishment Act, 2010 (and equivalent state-level legislations) set out basic quality standards and registration requirements for hospitals and nursing homes.
  • The Legal Metrology (Packaged Commodity) Rules, 2011 prescribe numerous labelling requirements, including declaration of customer care number, on the package.
  • The Consumer Protection Act, 1986 / the Consumer Protection Act, 2019 provides redressal to patients and their relatives from medical negligence through compensation.            

Key things to remember

  • Not all diagnostic equipment are regulated. For the longest time, glucometers and blood pressure monitors were not regulated in India. However, when glucometer is sold with a test strip, the kit is regulated.
  • The regulation of IVDs differs with their risk characterization. Confirmatory IVDs have higher categorization than Screening IVDs.
  • Prior to 2018, import of IVD kits/reagents for HIV, HBV, HCV and blood grouping sera required a registration certification in addition to an import license. The requirement for registration certificate has been done away with.
  • A performance evaluation report (PER) is required for issuance of manufacture or import license for new IVDs.
  • The performance evaluation of IVDs may be done by the manufacturer, except when required by the regulatory authority to be done at a government laboratory in case of life-threatening infections / agent.
  • Any imported IVD ought to have at least 60% residual shelf life if its shelf life is more than a year. For IVDs whose shelf life is less than a year,  40 – 50% of residual shelf life is mandatory for import.
  • The Indian Council of Medical Research has published the Draft Essential Diagnostic List. This list, when finalized, should streamline government procurement, but could also raise price control concerns on account of these diagnostic substances being ‘essential’ in nature.

Important sub-segments and related industries

  • Reagents
  • Point of care devices
  • Precision diagnostics
  • Molecular diagnostics
  • Diagnostic equipment

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