APRIL 15, 2020

By Jyoti Pal , Joint Partner and  Shivani Kalra , Associate, Lakshmikumaran & Sridharan

SECTION 3(b)(iv) of the Drugs and Cosmetics Act, 1940 states that only those devices notified by the Central Government under said section, will constitute a 'drug' under the Drugs and Cosmetics Act, 1940. Till date, only 37 devices have been notified under section 3(b)(iv) of the Drugs and Cosmetics Act, 1940.

As per office order dated 09.07.2014 issued by the Ministry of Health and Family Welfare, import of non-notified devices does not require any registration, license, permission, NOC etc. under the Drugs and Cosmetics Act, 1940. Therefore, other than these 37 devices notified, all other medical devices (not notified) are not subject to the rigors of the Drugs and Cosmetics Act, 1940 and its allied Rules with respect to requirements of licensing, registration, permission, NOC etc.

That situation will change for a number of devices since the Central Government, vide notification dated 11.02.2020 issued by the Ministry of Health and Family Welfare, has now included a broad category of devices within the definition of a 'drug' under Section 3 (b) (iv) of the Drugs and Cosmetics Act, 1940. This notification has come into effect from 01.04.2020.

A wide range of devices, which can either be an instrument, appliance, apparatus, implant or any other material, including software and accessories, will now fall within the definition of 'drug' provided such devices perform any of the following functions of -

(i) diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder;

(ii) diagnosis, monitoring, treatment, alleviation or assistance for, any injury or disability;

(iii) investigation, replacement or modification or support of the anatomy or of a physiological process;

(iv) supporting or sustaining life;

(v) disinfection of medical devices; and

(vi) control of conception

As it can be seen, this notification seeks to include devices within the scope of drug, basis the function of that device, instead of listing the devices by their name like it was done, when 37 devices were notified. Apart from the function performed by the device, the notification also makes the intention of the manufacturer relevant along with the means by which the device performs its primary function for the purpose of deciding whether a given device falls within the notification.

The notification states that for a device to fall within the newly notified category of devices, its manufacturer must intend for it to have a medical purpose. The term 'medical purpose' as such is not defined in the Drugs and Cosmetics Act, 1940 or its allied rules. The intention of the manufacturer further seems to bring subjectivity and a point for debate as to whether a device is or is not intended to be used for medical purpose. No parameters have been prescribed for determination of the same. It is unclear at this moment as to how would a manufacturer be able to convey its intention either ways. Is it going to be advertisement for the device or markings on the device or an approval from respective authority or mere functional capability of the device? In the case of Roys Industries Limited. Vs. Commissioner of Central Excise, Hyderabad - 2010-TIOL-1251-CESTAT-BANG-LB, the bench has held that in order to understand the intention of the manufacturer with respect to the goods manufactured by him, the marketing pattern adopted by the manufacturer will be relevant. In the said case, the bench tried to understand the intention of the manufacturer in order to understand whether the given packaged commodity was "intended for retail sale" as stated in the Legal Metrology (Packaged Commodities) Rules, 2011.

The European Union Regulation 2017/745 on medical devices clearly states that the 'intended purpose' of a device will be determined according to the data supplied by the manufacturer on the label or the instructions for use or promotional material. Further, the regulation states that statements made by the manufacturer in the clinical evaluation will also be relevant to understand the product's 'intended purpose'.

Keeping the European Union Regulation in mind, devices like smart watches that can track its user's heart rate may not fall within the newly notified category if the manufacturer does not intend such heart rate tracking to be used for a medical purpose. But given that the Indian Drugs and Cosmetics Act, 1940 and its allied Rules do not have guidance similar to the one given in the European Union Regulation, can authorities claim that a smart watch has a medical purpose if the measurement done by the smart watch is so accurate that users actually use it for a medical purpose like that of monitoring heart rate?

Further, the definition makes it very clear that a device which uses pharmacological, immunological or metabolic means of action to achieve the purposes enlisted above will be excluded from this newly notified category of devices. Though these three means of action have not been defined in the Drugs and Cosmetics Act, 1940 or its allied rules, they can broadly be said to be associated with medicinal products. In other words, it can be said that medicinal products use pharmacological, immunological or metabolic means of action to achieve their primary purpose. In fact, the erstwhile European Union directive 93/42/EEC on Medicinal Products defines 'Medicinal Product' as a substance that exerts a pharmacological, immunological or metabolic effect on human beings for its functioning.

Therefore, the exclusion of devices that use these three means of action for achieving their primary function is perhaps to exclude medicinal products, for which government implements different compliance requirements.

The notification has clarified that devices that are assisted by pharmacological, immunological or metabolic means will be included within the notification. In other words, in order to be covered under the aforesaid notification, a device can be assisted in performing its primary function by these three means but must not actually perform its primary function by these three means. For example, a catheter may be used in association with a gel that makes the insertion of this catheter easier. Even if the gel uses pharmacological, immunological or metabolic means of action, it will do so only to assist the catheter in performing its function of drainage of fluids. In this case, the catheter does not use any of these three means to perform its function of drainage of fluids and thus, shall be covered within the scope of medical device as per the notification.

It is to be noted that the language used for defining the medical devices in this Notification is not novel and is not being used for the first time. The definition of the term 'medical device' was finalized in the year 2012 by the World Health Organization ('WHO') by its Global Harmonization Task Force. WHO had recommended regulatory authorities in different countries to adopt this definition, which has now been adopted by the Central Drugs Standard Control Organization.

Though a wide category of devices has been notified to be included within the definition of 'drug', it is important to note that these devices will not be required to get the licenses that were required for previously notified medical devices. This is because the Medical Device Rules, 2017 have been amended vide another Ministry of Health and Family Welfare notification dated 11.02.2020, to exempt all devices that do not fall within the Annexure to the Eighth Schedule to the Rules, from complying with the provisions of the Rules. The Annexure to the Eighth schedule to the Rules enlists all medical devices notified before the aforesaid notification dated 11.02.2020. However, this exemption is subject to the medical device obtaining registration under Chapter IIIA of the Medical Device Rules, 2017 as inserted vide this amendment notification dated 11.02.2020. Both notifications dated 11.02.2020 will be effective from 01.04.2020.

In the light of introducing a broad definition for medical devices, it is important for all the companies dealing with devices with functions as mentioned above or being used for medical purpose to know for sure if they need to obtain registration for their devices or not.

[The views expressed are strictly personal.]