Authors: Adv. Rajneesh Sood & Adv. Gurpreet Singh
Date: February 2021
All medical devices are now defined as drugs!!!
THE IMPLICATION OF THE GOVERNMENT NOTIFYING MEDICAL DEVICES AS ‘DRUGS’ UNDER THE PROVISIONS OF THE DRUGS AND COSMETICS ACT, 1940 AS AMENDED UPTO DATE: – A PERSPECTIVE.
With the “medical devices” being notified as “Drugs” with effect from April 1, 2020, under the provisions of the Drugs and Cosmetics Act 1940 (“DCA”) questions may arise as to:
- Whether a ‘Registered Medical Practitioner’ (“RMP”) is eligible to procure ‘medical devices’ without holding retail/wholesale license?
- Are Private hospitals eligible to procure ‘medical devices’ without holding retail/wholesale license?
- What information a seller of medical devices must obtain from the buyer of such drugs/medical devices?
The term “Drug” is defined under Section 3(b)(iv) of the DCA in an inclusive manner to include within its scope and ambit, the “medical devices”. Therefore, the provisions of DCA are applicable to the medical devices as well.
The Medical Devices Rules, 2017 (“MDR”) were notified by the Government of India from January 1, 2018, however, the said Rules do not provide for specific conditions for the sale of medical devices. In terms of the provisions of Chapter XI of the MDR, they specifically refer to Part VI of the Drugs and Cosmetics Rules, 1945 (“DCR”) which relates to the “Sale of Drugs Other than Homeopathic Medicines”. Further, it may be noted that since all the medical devices have been notified as “drugs” with effect from April 1, 2020, the expression ‘drug’ wherever appears in Part VI of DCR, it is to be construed as referring to ‘medical device’ for the purpose of MDR.
DCR mandates every person to obtain and retain requisite license to sell, stock, exhibit or offer for sale or distribute medical devices, in wholesale or retail. Rule 65 of the DCR prescribes general conditions of different licenses. Apart from the general conditions as contained in Rule 65 of the DCR, the ‘specific conditions’ that are mentioned in the license are also to be complied with by the licensee. One such specific conditions as contained in the license to sell, stock, or exhibit or offer for sale or distribute by ‘WHOLESALE’, medical devices (Form 20-B) as relevant to the context under consideration reads as under:
- No drug shall be sold unless such drug is purchased under a cash or credit memo from a duly licensed dealer or a duly licensed manufacturer.
- No sale of any drug shall be made to a person not holding the requisite licence to sell, stock or exhibit for sale, or distribute the drug. Provided that this condition shall not apply to the sale of any drug to —
- an officer or authority purchasing on behalf of Government, or
- a hospital, medical, educational or research institution or a registered medical practitioner for the purpose of supply to his patients, or
- a manufacturer of beverages……
Besides, Rule 88 of the MDR starting with a non-obstante clause, obligates any person having a valid licence to sell, stock, exhibit or offer for sale or distribute by retail or wholesale, to supply “invasive medical devices” to be implanted through surgical intervention to a ‘hospital’ against a delivery challan and obligating the licensee to also ensure that specified storage conditions are met by the hospital and the record in respect of the use of the medical devices in the surgical intervention is also maintained.
Further, Rule 90 of the MDR provides for exemption from the provisions of MDR to the extent and subject to the conditions that are laid down in the Eighth schedule to the MDR, which the Central Government may amend from time to time.
The Central Government may grant specific exemptions from registration requirement and/or licensing requirements and list the conditions of exemptions in the Eighth schedule. Entry #3 in the Eighth schedule as is relevant merits perusal, and it reads as under:
| S.No. | Class of medical devices | Extent and conditions of exemption |
|---|---|---|
| 1. | Medical devices supplied by a registered medical practitioner to his own patient or any medical device supplied by a registered medical practitioner at the request of another such practitioner if it is specially prepared with reference to the condition and for the use of an individual patient provided the registered medical practitioner is not (a) keeping an open shop or (b) selling across the counter, for distribution or sale of medical devices in India to a degree which render him liable to the provisions of Chapter IV of the Act and the rules made thereunder. |
All provisions of Chapter XI of these rules which require them to be covered by a sale licence subject to the following conditions: -
|
| 2. | Medical devices supplied by a hospital or dispensary maintained or supported by Government or local body. |
All provisions of Chapter XI of these rules which requires them to be covered by a sale licence subject to the following conditions: -
|
| 3. | All medical devices except those specified in the Annexure of the Eighth Schedule. (The Annexure lists down medical devices that are exempted from the registration) | All the provisions of these rules subject to the condition that such medical devices shall be registered under CHAPTER IIIA of these rules: Provided that such exemption shall cease after a period of thirty months for low risk - Class A and low moderate risk - Class B and after a period of forty-two months for moderate high risk – Class C and high risk – Class D devices, respectively from the date of this notification. |
On the perusal of Rule 87 and 88 of the MDR read with the provisions of Chapter VI, more particularly Rule 65 of the DCR, the additional conditions of license in Form 20B as prescribed further read with entry 4 under the Eighth schedule, suggests overlapping and ambiguity on account of the following:
- Rule 87 specifically provides that subject to the provisions of MDR, the provisions of Part VI of the DCR in respect of the sale of medical devices shall be applicable mutatis-mutandis, to the sale of medical devices.
- Rule 88 starts with a non-obstante clause.
- The combined reading of A and B above suggests that the provisions of the MDR shall override any contradictory or overlapping provision contained in the DCR.
- With respect to sale of medical devices to the hospitals particularly, entry 4 in the Eighth Schedule exempts only the sale of medical devices to hospitals or dispensaries maintained or supported by Government or local body from the provisions of Chapter XI of the MDR and the said exemption is to the extent and on the conditions specified against the said entry.
- The combined reading of Rule 88(1) and entry #4 of the Eighth schedule suggests that a licensed dealer may supply medical devices to the Government hospitals against a delivery challan and the licensed dealer shall generate a cash or credit memo against the supply of such medical devices. In other words, for the supply of medical devices to the Government hospitals, a licensed dealer need not insist on the copy of the license of retail from such recipient Government hospital.
- Further, under entry #4 of the Eighth schedule, condition (a) authorises the Government hospitals to dispense and supply medical devices though under the supervision of a qualified person (pharmacist) and condition (c) is suggestive of acknowledging the practice of sale of medical devices by Government hospitals to its patients.
- The Eighth schedule to the MDR nowhere grants exemption to any of the private hospitals from any provision of the MDR or Chapter VI of the DCR even though condition 3(ii) (b) of Form 20B (in which license for wholesale is granted) specifies that sale of drugs (including medical devices) to a hospital, medical, educational or research institution or a RMP for the purpose of supply to his patients can be made without such hospital etc. having license under the DCR. An RMP is granted exemption from the provisions of Chapter XI under entry #3 of the Eighth schedule to the MDR subject to the conditions specified therein.
- Further, with respect to the sale of medical devices, the provisions of MDR shall prevail over any contradictory provisions contained in the DCR and in the absence of any specific exemption provided under Eighth schedule to private hospitals, medical, educational or research institution, no sale of medical devices to such private hospitals, medical, educational or research institution can be made by a licensed dealer under DCA read with the MDR. Accordingly, the condition 3(ii)(b) of Form 20B as prescribed under DCR being contradictory to the provisions of MDR cannot be relied upon in justification for effectuating any sale to private hospitals etc. without such hospitals etc. holding a valid license under the DCA.
- The provisions of the DCA, DCR and MDR which impose regulatory framework/mechanism must be interpreted strictly even though harmoniously. The Hon’ble Kerala High Court uphold this spirit.
In Qualified Private Medical Practitioners Vs. State of Kerala, (WP(c) No. 38494 of 2003(Y) where the State Drug Controller insisted that the petitioner’s hospitals/nursing homes must have license for dispensing medicines/drugs which was challenged by way of a writ on the grounds that Government hospitals were exempt from holding the license under the provisions of DCR and the exclusion of private hospitals from the exempted category was violative of the fundamental rights under Article 14 of the Indian Constitution and mandating the private hospitals to obtain license shall cause inconveniences. The Hon’ble Kerala High Court dismissed the writ holding that private hospital cannot be equated with a hospital maintained or supported by the Government or local body and such inconvenience cannot be a ground to interfere with the operation of the DCA, especially in the field of drugs.
In view of the foregoing, following inference may be derived:
- If a nursing home, clinic or a private hospital is procuring medical devices whether for supply to its own patients or for resale, then such nursing home, clinic or a private hospital must obtain and hold license under DCR, for the exemption from obtaining license in terms of entry #4 to the Eighth schedule is only limited to the hospitals which are owned or supported by the Government or local authorities.
- One can sell medical devices to an RMP without insisting on the license in the name of such RMP if he is procuring the medical devices for treating his own patients and not for re-sale in retail through his clinic etc.
- Any license holder under the DCA is obligated to sell the medical devices to a dealer who is holding and maintaining a valid license under the DCA.
As regards the sale of medical devices to an RMP for treatment of his patients, the seller should either make the sale against a valid purchase order mentioning his Indian Medical Council registration number as also the purpose of such procurement OR against copy of his certificate of registration as an RMP and an undertaking from him agreeing to abide by the three conditions as are specified against entry #3 of the Eighth Schedule.
An RMP who is intending to procure dental implant products for re-sale to other clinics etc. loses the exemption granted under the Eighth Schedule and must obtain a license under the provisions of DCR.
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