Life Sciences 2020

Last Updated March 18, 2020

India

Law and Practice

Authors



Obhan & Associates is a professionally managed law firm with a well-established practice in the area of IP and corporate laws. The firm was established in 2007 and has offices in Delhi and Pune. The firm has been recognised for its expertise in patent, trade mark, copyright and design protection. The corporate practice of the firm offers a broad range of transactional and advisory services to institutions, entrepreneurs as well as public and private companies. The firm has a well-balanced domestic and international clientele and represents a cross-section of industries, including fast-moving consumer goods, mechanical engineering, hardware and electronics, life sciences, pharmaceuticals, software, apparel, packaging and retail, process engineering, fashion brands, automobiles and parts, paints and chemicals, magazines and publications and textiles. The life sciences and pharmaceuticals team of the firm has six experienced patent agents and lawyers that serve a varied client base that includes individual inventors, universities and national and international corporations.

Legislations and Regulations

  • The Drugs and Cosmetics Act, 1940 (the "DC Act") along with the Drugs and Cosmetic Rules,1945 (the "DC Rules") regulate the manufacturing, import, sale, and distribution of the pharmaceuticals in India.
  • The Medical Device Rules, 2017 (the "MD Rules") under the DC Act along with the DC Rules regulate the import, manufacture, sale, and distribution of the following:
    1. substances used for in vitro diagnosis and surgical dressings, surgical bandages, surgical staples, surgical sutures, ligatures, blood and blood component collection bag with or without anticoagulant covered under the DC Act;
    2. substances including mechanical contraceptives (condoms, intrauterine devices, tubal rings), disinfectants and insecticides notified under the DC Act; and
    3. medical devices notified under the DC Act (notified medical devices).
  • The New Drugs and Clinical Trials Rules, 2019 (the "CT Rules") under the DC Act regulate clinical trials, bio-equivalence studies, bio-availability studies and Ethics Committee (EC) for new drugs and investigational new drugs for human use.
  • The Narcotic Drugs and Psychotropic Substances Act, 1985 (the NDPS Act) prohibits a person to produce/manufacture/cultivate, possess, sell, purchase, transport, store, and/or consume any narcotic drug or psychotropic substance.
  • The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (the "DMR Act") regulates advertisement of pharmaceuticals in India. It prohibits advertisements of drugs and remedies that claim to have magical properties.
  • The Medicinal and Toilet Preparations (Excise Duties) Act, 1956 provides for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol, and narcotic drug or narcotic.
  • The Essential Commodities Act,1955 and the Drugs (Prices Control) Order 2013 (DPCO) thereunder regulate the price of drugs and medical devices specified in the National List of Essential Medicines (the NLEM).
  • The Rules for the manufacture, use, import, export and storage of hazardous micro-organisms/genetically engineered organisms or cells, 1989, notified under the Environment (Protection) Act, 1986 (1989 Rule).

In addition to the above, there are specific guidelines for various issues, for example, the conduct of clinical trials, market authorisation of bio-similars, rDNA research, ethics and privacy of healthcare-related data.

Regulatory Bodies/Committees/Authorities

  • The Central Drugs Standard Control Organization (CDSCO) is a national regulatory body for drugs and medical devices. The CDSCO works under the Directorate General of Health Services (DGHS) of the Ministry of Health and Family Welfare of India (MoHFW). It is headed by the Drugs Controller General of India (the DCGI). The DGCI or the Joint Drugs Controller or the Deputy Drugs Controller appointed by the Central Government under the DC Act constitute the “Central Licensing Authority” (CLA).
  • The CDSCO is advised by two statutory committees, the Drug Technical Advisory Board (the DTAB) and the Drugs Consultative Committee (the DCC). The DTAB advises the Central Government and the State Governments on the technical matters and the DCC secures uniform implementation of the DC Act.
  • The Notified Body under the MD Rules is responsible for carrying out the audit of the manufacturing sites of Class A and Class B medical devices to verify conformance with the Quality Management System. The National Accreditation Body (NAB) under the MD Rules lays down the standards and conformity assessment activities for the accreditation of the Notified Body.
  • The Narcotics Control Bureau regulates and implements the provisions of the NDPS Act.
  • The National Pharmaceutical Pricing Authority (NPPA) is responsible for monitoring, fixing and revising the prices of drugs and medical devices, enforcement of provisions of the DPCO.
  • The Indian Council of Medical Research (ICMR) is the apex body for the formulation, coordination, and promotion of biomedical research.

Any person who is aggrieved by any order passed by the CLA (for example, cancellation, suspension or rejection of the application) may file an appeal to the Central Government, within the stipulated period. The Central Government may, after an inquiry into the matter considered necessary and after giving the appellant an opportunity for making a representation in the matter, make orders in relation to the appeal.

An appeal can be filed against any order of a regulatory authority according to the process laid down under the relevant legislation or regulation.

There are different categories of pharmaceuticals and medical devices, which are regulated differently. The DC Rules provide for the classification of drugs in various schedules. Each schedule has a guideline for labelling, storing, selling, displaying and prescribing a listed drug. The schedules are as follows:

  • Schedule C: a list of biological and immunological products, antibiotics, ophthalmic preparations, and all products for parenteral use.
  • Schedule C(I): a list of drugs of biological origin namely alkaloids, hormones, vitamins and antibiotics for oral use.
  • Schedule G: a list of drugs that can be administered only under the supervision of a registered medical practitioner.
  • Schedule H: a list of drugs that are required to be dispensed on the prescription of a registered medical practitioner.
  • Schedule H1: a list of drugs including antibiotics, habit-forming drugs, and a few anti-tuberculosis medicines.
  • Schedule X: a list of psychotropic drugs which are required to be dispensed on the prescription of a registered medical practitioner. A special retail license is required for selling these drugs.

Similarly, the MD Rules provides for a risk-based classification of all medical devices as follows:

  • Class A: low-risk equipment for example, absorbent cotton wools, surgical dressing, alcohol swabs, etc.
  • Class B: low, moderate risk equipment, for example, thermometer, BP monitoring device, disinfectants, etc.
  • Class C: moderate high-risk equipment, for example, implants, hemodialysis catheter, etc.
  • Class D: high-risk equipment, for example, angiographic guidewire, heart valve, etc.

The CDSCO regulates the clinical trials of drugs and medical devices. The CLA is entrusted with the task of granting permission for clinical trials and regulates the sale and import of drugs and medical devices for use in the clinical trials. A clinical trial is required to be conducted in accordance with the Good Clinical Practices (GCP) Guidelines issued by the CDSCO.

The CT Rules regulate the clinical trials, bio-equivalence studies, bio-availability studies and investigations into new drugs for human use. The DC Rules regulate clinical trials for veterinary drugs. 

The MD Rules regulate the clinical investigation of medical devices and the clinical performance evaluations of new in vitro diagnostic medical devices. The EC for clinical investigations of medical devices is constituted in accordance with the DC Rules.

The National Guidelines for Gene Therapy Product Development and Clinical trials, 2019 (the GTP guidelines) provide guidance for conducting clinical trials for areas pertaining to gene therapy.

The National Ethical Guidelines for Biomedical and Health research involving human participants, 2019, and the National Ethical Guidelines for Biomedical Research involving Children (collectively, the Ethical Guidelines) provide general guidance for ethically conducting clinical trials involving adults and children.

Procedure for Securing Authorisation to Undertake a Clinical Trial

In order to obtain market authorisation for any of the following, one is required to conduct detailed clinical trials or investigations or performance study as the case may be:

  • New drug: a "new drug" is considered "new" for a period of four years from the date of its first approval and can be any of the following:
    1. a drug that has not been used in India to any significant extentunder the conditions prescribed, recommended or suggested in the labelling thereof, and has not been recognised as effective and safe by the CLA for the proposed claims; also, the limited use, if any, has been with the permission of the CLA;
    2. a drug already approved by the CLA for certain claims, which is now proposed to be marketed with modified or new claims, namely, indications, dosage, dosage form (including sustained release dosage form) and route of administration;
    3. a fixed-dose combination of two or more drugs individually approved earlier for certain claims, which are now proposed to be combined for the first time in a fixed ratio, or if the ratio of ingredients in an already marketed combination is proposed to be changed, with certain claims, namely indications dosage, dosage form (including sustained release dosage form) and route of administration;
    4. biologics, including the bio-similars; or
    5. a modified or sustained-release form of a drug or a novel drug delivery system of any drug approved by the CLA
  • Investigational new drug: a new chemical or a biological entity or substance that has not been approved for marketing as a drug in any country.
  • Investigational medical device: a device which does not have its predicate device or a device which after being authorised for marketing claims for the new intended use or new population or new material or major design change.
  • New in vitro diagnostic medical device: any in vitro diagnostic medical device covered under the MD Rules, which has not been approved for manufacture for sale or for import by the CLA and is being tested to establish its performance for the relevant analyte or other parameter related thereto including details of technology and procedure required.

An application for conducting a clinical trial can be filed in a prescribed format with all the necessary documents and information before the CLA via SUGAM, an online licensing portal. The CLA is required to evaluate the application within the prescribed time. The application for drugs discovered, researched, and manufactured in India are required to be evaluated within 30 days. If the CLA does not respond within 30 days to the application for drugs developed in India, the applicant may conclude that the permission to conduct the trial has been granted.

The clinical trial can be initiated only after the approval of the trial protocol and other related documents by the EC. The EC for a particular trial site reviews and accord approval to the clinical trial, bio-availability or bio-equivalence protocol and the related documents and forward its report to the CLA. In case, the EC rejects the protocol, the details of the same should be submitted to the CLA before seeking approval of another EC for conducting the clinical trial at the same site. The CLA is informed about the approval granted by the EC within the stipulated time of the grant of such approval. After scrutiny of the information and documents furnished with the application, the CLA may either grants permission to conduct the clinical trial or reject the application for the reasons to be recorded in writing. The permission to initiate a clinical trial remains valid for a period of two years from the date of its grant. 

The MD Rules discusses two types of clinical investigations, a pilot study and a pivotal study. A pilot study is an exploratory study which is used to acquire specific essential information about a medical device before beginning the pivotal clinical investigation. A pivotal study is a confirmatory study to support the safety and effectiveness evaluation of the medical device for its intended use. For an investigational medical device developed in India, the applicant is required to conduct both pilot and pivotal studies in India.

Waiver of the Requirement of the Local Clinical Trial in Certain Cases of New or Investigational Drugs

The CLA, with approval from the Central Government, may waive the requirement of the local clinical trial for the approval of a new drug already approved in other countries in the following cases:

  • the new drug is approved and marketed in countries specified under the CT Rules: and no major unexpected serious adverse events have been reported, and:
    1. there is no probability or evidence, on the basis of existing knowledge, of difference in the Indian population of the enzymes or gene involved in the metabolism of the new drug or any factor affecting pharmacokinetics and pharmacodynamics, safety and efficacy of the new drug; and
    2. the applicant has given an undertaking in writing to conduct Phase IV clinical trial to establish safety and effectiveness of such new drug as per the design approved by the CLA; and
  • for import of a new drug for which the CLA had already granted permission to conduct a global clinical trial, which is ongoing in India, and in the meantime this new drug has been approved for marketing in a country specified under the CT Rules, and
    1. there is no probability or evidence, on the basis of existing knowledge, of difference in Indian population of the enzymes or gene involved in the metabolism of the new drug or any factor affecting pharmacokinetics and pharmacodynamics, safety and efficacy of the new drug; and
    2. the applicant has given an undertaking in writing to conduct Phase IV clinical trial to establish safety and effectiveness of such new drug as per design approved by the CLA.

Further, the requirements may be relaxed, abbreviated, omitted or deferred in case of life-threatening or serious disease conditions or rare diseases and for drugs intended to be used in the diseases of special relevance to Indian scenario or unmet medical need in India, disaster or special defence use.

The CLA may relax requirement of local Phase IV clinical trials, where the new drug is indicated in life-threatening or serious diseases or diseases of special relevance to Indian health scenario or for a condition which is unmet need in India, for the rare diseases for which drugs are not available or available at a high cost or if it is an orphan drug.

Waiver of the Requirement of the Pivotal Studies in Certain Cases of New or Investigational Medical Devices

A pivotal clinical study is not required to be conducted for investigational medical devices classified under class A of the MD Rules. However, in exceptional cases, the CLA, may, for reasons to be recorded in writing, mandate conducting a pivotal clinical study of such devices as well, depending on the nature of the medical device.

For investigational medical devices developed and studied in a country other than India, the applicant is required to submit the details of the pilot clinical investigation or relevant clinical study data generated outside India along with the application. The CLA may grant permission to either repeat pilot study or to conduct pivotal clinical investigation only.

The clinical investigation may not be required in case of investigation medical devices approved for at least two years in the US, UK, Australia, Canada or Japan, if certain conditions are met.

It is mandatory to register clinical trials prospectively in the ICMR-Clinical Trials Registry India (ICMR-CTRI), which is a free, online platform.

The trials registered on the CTRI are publicly available and free to search. 

The Ethical Guidelines set out the principle of ensuring the privacy and confidentiality of the participants of the clinical trials.

Further, the CT Rules and the MD Rules require the investigator of a clinical trial to give an undertaking that they will maintain the confidentiality of the identities of all the participants and ensure the security of the clinical trial data

This is not applicable in this jurisdiction.

The DC Act and the MD Rules provide definitions of a "drug" and a "medical device" respectively. Only products that fall within these definitions are regulated. 

Owing to the special nature of biologics, there are specific requirements that need to be fulfilled to obtain marketing authorisation for them. 

All types of bio-logics including the bio-similars are considered as "new drugs" under the DC rules. Therefore, the application for obtaining market authorisation is required to be submitted with detailed clinical trial data for all types of biologics. 

The applicant is required to conduct the following studies in respect of all types of biologics:

  • pre-clinical studies;
  • clinical studies; and
  • post-market surveillance.

In addition, comparative data of the pre-clinical studies and clinical studies of the bio-similars and reference bio-logics are required to be submitted for a bio-similar.

In addition to the DC Act, the DC Rules and other general guidelines and regulations mentioned above, the following regulations and guidelines are specifically relevant for the approval of biologics: 

  • 1989 Rules;
  • The Guidelines on Similar Biologics: Regulatory Requirements for Marketing Authorization in India, 2016 (the Similar Biologics Guidelines), which lay down the regulatory pathway for a Similar Biologic;
  • Regulations and Guidelines on Biosafety of Recombinant DNA Research and Biocontainment, 2017 (rDNA Research Guidelines), which provide guidance on handling hazardous biological material, recombinant nucleic acid molecules and cells, organisms, and viruses containing such molecules;
  • The national guidelines for gene therapy product development and clinical trials, 2019 (the GTP guidelines) that aim to guide and enable the stakeholders to comprehend and comply with the regulatory requirements for research and development of GTPs in India: it also provides basic guidance for research involving human participants, including clinical trials, pertaining to the broad area of gene therapy;
  • Guidance Document for Industry: Submission of Stability Data and Related Documents for Review and Expert Opinion for Granting Post-approval Changes in Shelf Life of Recombinant Biotherapeutic Products and Therapeutic Monoclonal Antibodies published by the National Institute of Biologicals 2016 (Post-Approval Guidelines) that provide recommendations to holders of marketing authorisation for recombinant technology-based products, who intend to make post-approval changes in shelf-life of such product in accordance with CDSCO guidance Document No - PAC/1108 Version – 1.1;  and
  • Guidelines and Handbook for Institutional Biosafety Committee (IBSC).

In addition to the CDSCO, the approval of the Biologics is overseen by the following:

  • Review Committee on Genetic Manipulation (RCGM): RCGM is responsible for authorising the conduct of research and development, exchange of genetically engineered cell banks for the purpose of research and development and review of data up to preclinical evaluation;
  • Institutional Biosafety Committee (IBSC): IBSC is required to be constituted by any person including research institutions handling hazardous microorganisms and/or genetically engineered organisms. IBSC is responsible for ensuring biosafety on-site, along with an initial review of applications to be recommended to RCGM. IBSC is also assigned with the responsibility to review and authorise firms for the exchange of aforesaid organisms for the purpose of research; and
  • Genetic Engineering Appraisal Committee (GEAC): GEAC reviews of applications and approval of activities where final drug product contains genetically modified organisms/living modified organisms.

An original licence or a renewed licence for manufacture for sale or distribution of drugs to sell drugs unless suspended or cancelled is valid for a period of five years on and from the date on which it is granted or renewed. If the application for renewal of a licence in force is made before its expiry or if the application is made within six months of its expiry, after payment of additional fee, the licence continues to be in force until orders are passed on the application. The licence is deemed to have expired if an application for its renewal is not made within six months after its expiry.

An import licence for a drug unless suspended or cancelled remains valid for a period of three years from the date of its issue. If an application for a fresh licence is made three months before the expiry of the existing licence the current licence is deemed to continue in force until orders are passed on the application.

The licence for manufacture, distribution, sale, import, and export of the medical devices granted under the MD Rules remain valid unless suspended, cancelled or surrendered. The licensee is required to pay a prescribed fee every five years to prevent the cancellation of the licence. If the licence is cancelled due to the non-payment of the fee within the stipulated time the licensee has to apply for a fresh licence.

If the licensee fails to comply with any of the stipulated conditions prescribed under the regulations, the CLA may suspend or the cancel the licence by an order in writing stating the reasons, after giving an opportunity to show cause why such an order not be passed. 

An application for market authorisation of a drug or a medical device may be filed electronically via SUGAM in the prescribed format with the prescribed fee. For a new drug or an investigational new drug/medical device or a new in vitro diagnostic medical device, the application must be accompanied by the detailed clinical trial data. For other types of drugs, the application must be accompanied by bio-equivalence and bio-availability studies.

An already approved drug or medical device with modified or new claims or a fixed-dose combination are treated as a new drug or an investigational medical device, respectively. In such cases, the application is required to be submitted with detailed clinical data.

The DC Act and the DC Rules provide for limited access to drugs or medical devices, the import of which is, otherwise, not allowed.

Small quantities of a new drug or investigational medical device may be imported for treatment of patients suffering from life-threatening diseases, or diseases causing serious permanent disability, or such disease requiring therapies for unmet medical needs, by a Medical Officer of a Government Hospital or an Autonomous Medical Institution providing tertiary care, duly certified by the medical superintendent of the Government Hospital, or Head of the Autonomous Medical Institution, subject to the specific conditions. 

Small quantities of a drug or a medical device, the import of which is otherwise prohibited, may be imported for personal use subject to the specific conditions. Further, the import of small quantities of a drug or a medical donated to a charitable hospital for the treatment of the patients free of cost may be allowed by the CLA.

The holder of the market authorisation for a new drug, an investigational new drug or medical device is under the obligation to conduct Post Market Surveillance (PMS) or phase IV clinical trials. The holder is required to submit the Periodic Safety Update Report (PSUR). The CLA may extend the total duration of submission of the PSUR if it is considered necessary in the interest of public health. The PSUR data is then be reviewed by the CLA in consultation with an expert committee. Based on the analysis of the expert committee, a decision is taken by the CLA on the safety and efficacy of the drug or medical device. The data emerging through the PSUR or any other PMS studies form the basis of further decisions about indications/usage/restrictions on indications of the drug or the medical device and further decision on the extension of the duration of submission of the PSUR data.

Currently, third parties cannot access any information regarding pending applications for marketing authorisations for drugs and medical devices.

Adulterated, misbranded, spurious or illegally distributed drugs and medical devices are regulated under the DC Act, the DC Rules and the MD Rules, as the case may be. The manufacture for sale or for distribution, selling, stocking, exhibiting or offering for sale or distribution of such drugs and medical devices is a penal offense punishable with imprisonment and/or fine of varying degree based on the seriousness of the offense.

The Customs Act, 1960 (the Customs Act), along with the Intellectual Property Rights (Imported Goods), and the Enforcement Amendment Rules, 2018 (the IPREA Rules), prohibits the import of goods that infringe on intellectual property (except patents). The Customs Act empowers the customs authority to confiscate goods subject to the conditions and procedures specified under the IPREA Rules. The owner of the IPR is required to record their IPR at the Indian Customs IPR Recordation Portal. The owner also has to sign a bond with the customs authority undertaking to pay the costs of retention/destruction of the infringing goods and to indemnify the Customs office for damages incurred during the retention/destruction.

Further, Customs can, on its own initiative, suspend the clearance of the imported goods if there is prima facie evidence or reasonable grounds to believe the goods are infringing IPRs. In such a scenario, the rights holder or its agent will have to comply with the requirements of the recordal within five days else the goods may be released.

The manufacturing plants of the drugs and the medical devices are subjected to an authorisation. The CDSCO is the main regulatory body for granting the authorisation.

The DC Rules lays down the requirement of factory premises, plant, and equipment for manufacturing depending on the type or schedule of drug or the type of medical device. The MD Rules also stipulates a Quality Management System that a manufacturer is required to use.

An application for authorisation of a manufacturing plant may be filed via SUGAM. Separate applications are required to be filed for separate premises. On the receipt of the application, the State Licensing Authority (SLA) inspects the manufacturing site. If the SLA is satisfied, a report is prepared and forwarded to the CLA. On receipt of the documents, an inspection of the manufacturing site is carried out by an Inspector (appointed by the CLA) along with an expert in the concerned field. If the CLA is satisfied, authorisation is granted to the applicant.

For Class A medical devices, a licence is granted within the prescribed time without an audit of the manufacturing site. However, the manufacturing site is audited by a registered notified body after the grant of the license. The licence remains valid if a licence retention fee is paid, before expiry, every five years from the date of its issue unless it is suspended or cancelled by the licensing authority.

The establishments engaged in the wholesale of the drugs and medical devices are subjected to an authorisation by the SLA.

An application for obtaining a wholesale licence to sell, stock, exhibit or offer for sale or distribute a drug or a medical device may be filed via SUGAM. The licence is issued based on the category of the drug and medical device in question.

A licence issued remains valid if licensee deposits a licence retention fee, before expiry, every five years from the date of its issue unless it is suspended or cancelled by the licensing authority.

See 1.3 Different Categories.

The DC Act and the DC Rules and the Customs Act, 1962 (the Customs Act) regulates the import and export of the drugs in India. The import and export of the medical devices are regulated by the MD Rules along with the DC Act and the Customs Act. The CDSCO and the Customs are the main regulatory bodies for implementing these legislations and regulations. The CLA grants the licence for import or export.

There are no specific requirements or qualifications required for a person to act as an importer of record. 

The importation of drugs and medical devices in India is subjected to prior authorisations from the CLA. Limited access to unauthorised drugs and medical devices is allowed in specific circumstances with specific conditions; see 3.5 Access to Unauthorised Products

The import of drugs and medical devices into India is regulated by the CDSCO under the DC Act, the DC Rules and MD Rules as the case may be. Any drug or medical device for which an import licence must be prescribed cannot be imported without one. The DC Act along with the DC Rules and MD Rules lay down the procedure for obtaining the import licence and standards of quality that must be met for the imported drugs and medical devices. Thus, the import of drugs and medical devices that are not of standard quality or are misbranded, adulterated or spurious is prohibited under the DC Act.

The DC Act and MD Rules also stipulate labelling requirements for imported drugs and medical devices. For example, the import of the following is prohibited:

  • any patented or proprietary medicine, unless there is displayed in the prescribed manner on the label or container thereof the true formula or list of active ingredients contained in it together with the quantities thereof; and
  • any drug which by means of any statement, design or device accompanying it or by any other means, purports or claims to cure or mitigate any such disease or ailment, or to have any such other effect, as may be prescribed.

Further, the Central Government has powers to prohibit the import of drugs and medical devices in the name of public interest.

India is not a member of any trade bloc or party to a Free Trade Agreement.

The DPCO controls the price of drugs and medical devices listed in the National List of the Essential medicines (NLEM) ("listed drugs and medical devices"). The NLEM is updated from time to time based on the recommendation of the MoHFW. The NPPA is the regulatory body that regulates and monitors the price of drugs and medical devices in India.

The DPCO provides a formula for calculating the ceiling price and the Maximum Retail Price (MRP) of the listed drugs and medical devices. In extraordinary circumstances, the government may fix the ceiling price or the retail price of any drug or medical device in public interest. Also, if the ceiling price or the retail price of the drug is already fixed and notified, the government may allow an increase or decrease in the same.

The DPCO sets out conditions that the manufacturers, dealers, and distributors are required to follow for the listed drugs and medical devices. Further, the DPCO stipulates that the government monitors the MRP of all drugs and medical devices including the non-listed drugs and medical devices and ensures that no manufacturer increases the MRP of a drug more than 10% of the MRP during the preceding 12 months.

According to the NPPA Policy, 2012, the following are kept out of any drug control:

  • a manufacturer producing a new drug patented under the Indian Patent Act, 1970 (the "Patents Act") and not produced elsewhere, if developed through Research and development in India ("indigenous R&D"), is eligible for exemption from price control in respect of that drug for a period of five years from the date of commencement of its commercial production in the country;
  • a manufacturer producing a drug in the country by a new process developed through indigenous R&D and patented under the Patents Act would be eligible for exemption from price control in respect of that drug for a period of five years from the date of the commencement of its commercial production in the country; and
  • a formulation involving a new delivery system developed through indigenous R&D would be eligible for exemption from price control for a period of five years from the date of its market approval in India.

According to the NPPA Policy, 2012, the key principles for the regulation of drug price are:

  • the essentiality of drugs;
  • the control of formulations prices only; and
  • market-based pricing.

The DPCO provides that at least initially, the source of market-based data will be the data available with the pharmaceuticals market data specialising company IMS Health and if the Government deems necessary, it may validate such data by appropriate survey or evaluation.

The Government funds and operates several healthcare/insurance schemes for reimbursement of the costs of pharmaceuticals and medical devices for people of weaker economic sections and government employees, for example, Ayushman Bharat, and Central Government Health Scheme.

The Government has created an institutional arrangement called the Health Technology Assessment in India (HTAIn) under the Department of Health Research (DHR). HTAIn is responsible for collating and where needed generating evidence related to the clinical effectiveness, cost-effectiveness, and safety of medicines, devices and health programs using the Health Technology Assessment (HTA) approach. The objective of this arrangement is to facilitate the process of transparent and evidence-informed decision making in the field of health. However, the arrangement is still at a very nascent stage and not fully functional.

The Indian National Cost database under the arrangement aims to provides a one-stop-shop for cost information for healthcare decision-making in India. The database is intended for a diverse set of users including health economists involved in economic evaluation, health care program managers establishing budgets, policy makers making resource allocation decisions, Ministry of Health personnel setting prices, health financing experts looking at resource requirements, researchers, consultants, NGOs and donors.

The prescription of drugs of a physician or a medical practitioner is regulated by the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 (amended 2016) (the IMC Regulations), formulated by the Medical Council of India under the Indian Medical Council Act, 1956 (the IMC Act). The IMC Regulations stipulate that:

  • a physician shall write his name and designation in full along with registration particulars in his prescription letterhead;
  • every physician should prescribe drugs with generic names legibly and preferably in capital letters and they shall ensure that there are a rational prescription and use of drugs;
  • the attending physician may prescribe medicine at any time for the patient, whereas the consultant may prescribe only in case of emergency or as an expert when called for; and
  • the prescription should also make clear if the physician himself dispensed any medicine.

Further, the DC Rules stipulate that the prescription must be in writing and signed and dated.

The Pharmacy Act, 1948, prohibits a person other than a registered pharmacist from the compounding, preparing, mixing, or dispensing any medicine prescribed by a medical practitioner. 

Currently, there are no specific rules for medical apps.

There are no specific rules for telemedicine in India and a physician can provide medical attention through a mobile device. As per the MCI Act, any person enrolled on the Indian medical register can practise as a medical practitioner in any state of India according to their qualifications. As such, the inter-state practise of telemedicine by medical practitioners is permissible. However, Indian courts have stated that prescriptions should not ordinarily be given to a patient without an in-person examination, except in cases of emergency (Martin F D’Souza . Mohd Ishfaq; (2009) 3 SCC 1).

There are no special rules for the promotion and/or advertising of medicines and medical devices through online portals, company webpages and social networks. The DC Rules and the DMR Act regulate the advertisement of drugs and medical devices in India in general. 

The Advertising Standards Council of India (ASCI), a non-profit organisation comprising media, advertising agencies and advertisers, has published a code regulating the publishing of advertisements in India, which also applies to advertisements relating to drugs.

The Uniform Code of Pharmaceuticals Marketing Practices (UCPMP), issued by the Department of Pharmaceuticals, has directions on the information promotional materials for drugs should contain.

The pharmacies can prescribe prescription drugs only on the production of a valid prescription.

Under the Information Technology Act, 2000 (the IT Act), a document that is required by law to be in writing would be deemed to be legal if available in an electronic form and accessible in a way that it can be used for future references. However, the IT Act further states that where the law requires for a document to be signed, it would be deemed to be legal only if digitally signed. This would imply that merely uploading a scanned copy of a prescription may not be recognised as valid under the law.

Currently, there are no specific rules that govern online sales of drugs and medical devices. The IT Act governs some of the legal issues pertaining to online sales but does not mention anything specific to drugs and medical devices.

In December 2019, the Delhi High Court issued an all-India ban on e-pharmacies, asking online pharmacies to shut down operations by 20 December 2019, and asking the Centre to notify regulations for companies by 31 January 2019. However, within a week the ban was suspended by the Madras High Court on an appeal filed by a group of e-pharmacy companies.        

The Union Health Ministry of India has issued draft E-pharmacy Rules for regulating the sale of drugs by e-pharmacies. The Rules are expected to come into force in the near future. 

The Electronic Health Record Standards for India, 2016 (the EHRS) issued by the MoHFW provide for standardisation and homogeneity, inter-operability in the capture, storage, transmission & use of healthcare information across various Health IT systems.

The IT Act, the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 (the Data Protection Rules) and the Information Technology (Intermediaries Guidelines) Rules, 2011, govern the protection of data. The definition of "sensitive personal data or information" of a person under the Data Protection Rules includes physical, physiological and mental health condition. On 24 August 2017, a nine-judge bench of the Supreme Court ruled that the right to privacy is a fundamental right for Indian citizens under Article 21 of the Indian Constitution.

A draft bill for Digital Information Security in Healthcare Act (DISHA) is being considered by India. One of the objectives of DISHA is to provide for the privacy, confidentiality, security and standardisation of the electronic health data and provide.

The kind of deal structure fructified between the parties depends upon the objective of the parties and the rationale behind the said collaboration. It could range from an option agreement to a licence agreement or collaboration or co-commercialisation agreements. It is very important for each agreement to explicitly detail specific terms and conditions customary to the transaction.

In case of any disputes between the parties, the agreement should state that the parties aim to resolve their disputes through good faith negotiations. In the event the dispute between the parties cannot be resolved within a stipulated time period (15 or 30 days), only then should the parties aim to resolve their disputes through arbitration. If the parties do proceed towards arbitration, the arbitrability of the dispute, ie, the subject matter of the dispute, should be related to any obligations under the commercial arrangements for the use of the intellectual property. Under Indian law, only disputes relating to rights in personam are arbitrable in nature and any dispute pertaining to rights in rem, for example regarding the validity of the intellectual property which is being licensed, would not be arbitrable.

The parties may mutually appoint one arbitrator who may have expertise in the subject matter of the dispute or appoint an arbitrator each, and their respective arbitrators may appoint a presiding arbitrator. The parties may choose to appoint technical arbitrators each, and the third arbitrator may be an individual with procedural expertise.

India does not have a separate legislation governing mediation. The Supreme Court has formed a committee to draft legislation to give legal sanctity to disputes settled through mediation. Therefore, the dispute resolution clause is recommended to be restricted to having disputes resolved through good faith negotiations and arbitration, prior to litigation.

It is a standard practice to define each party's obligations in terms of the efforts expected to be put in by them, for instance on "commercially reasonable efforts" or "best efforts" basis. Effort clauses are customarily defined to cater to the intricacies of each transaction. The agreement should capture deliverables for each party and the respective timelines for the same. Milestones (if any) should be elucidated upon in the agreement between the parties, along with the respective tasks.

The licence agreement should provide for implications of change in control of either party. A change of control clause may be triggered by a sale of more than 50% of a party's stock, sale of substantially all the assets of a party or a change in most of the board members of a party, etc. As a standard practice, in the event of change in control of either party, certain rights are given to the other party. These rights could be termination rights (providing the counterparty with the right to unilaterally terminate the agreement in such event) and consent rights (the target company may be required to obtain consent from the counterparty). It is very important to analyse the impact of change in control in each transaction and define the rights of the parties specifically in the agreement.

The "consequences of termination" is one of the key terms in a licensing agreement, which is negotiated between the parties. The agreement should expressly state each party’s rights upon termination. This will include clauses regarding return of confidential information, payment of amounts accrued prior to termination, etc. Each party’s rights in the IP, including any data generated under the agreement, must be clearly spelt out in the agreement in order to avoid any ambiguity or dispute regarding respective rights of each party.

Patents are regulated in India under the Patents Act and the Patents Rules, 2003 (the Patents Rules). The most common issue encountered by patent applicants is of patentability of the subject matter for which a patent is sought. Apart from being novel, inventive and useful, the subject matter must not fall within a list of inventions specifically excluded from patentability. Specific exclusions with respect to pharmaceuticals and medical devices are:

  • an invention which could be contrary public order or morality;
  • any living thing or non-living substance occurring in nature;
  • mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance;
  • the mere discovery of any new property or new use for a known substance;
  • a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance;
  • mere arrangement or re-arrangement or duplication of known devices each functioning independently of one another in a known way;
  • any process for the medicinal, surgical, curative, prophylactic diagnostic, therapeutic or other treatment of human beings or any process for a similar treatment of animals to render them free of disease or to increase their economic value or that of their products;
  • plants and animals in whole or any part thereof; and
  • traditional knowledge.

Second and subsequent medical uses of a known product are not patentable in India. Use, per se, is not patentable in India.

There are no mechanisms for patent term extension for drugs in India.

The following acts when performed with the consent of the patentee constitutes an infringement of a patent:

  • making, using, offering for sale, selling or importing for those purposes a patented product in India; and
  • using a patented process, and using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India.

Defences to Patent Infringement

The Patents Act provides for the following defences to patent infringement:

  • use of a patented invention on foreign vessels or aircraft temporarily or accidentally within the territory of India;
  • making, constructing, using, selling or importing a patented invention solely for use reasonably related to the development and submission of information required under any law that regulates the manufacture, construction, use, sale or import of any product in India or any other country; 
  • importation of patented products by any person from a person who is duly authorised under law to produce and sell or distribute the product;
  • importation or manufacture of a patented product or a product made by a patent process patented article or an article made through a patented process by or on behalf of the government for its own use;
  • use or manufacture of a patented product or a product made by a patent process or use of a patent process merely for experiment or research or for imparting instructions to pupils;
  • importation of the patented medicine or patented drug by the government for distribution in any dispensary, hospital or other medical institution maintained by or on behalf of the government or any other dispensary, hospital or other medical institution which the central government having regard to the public service specify by notification in the Official gazette.

Further, in any suit for infringement of a patent, every ground on which it may be revoked is available as a ground for defence.

Compulsory Licences

The Patents Act provides for Compulsory Licence (CL) in certain specific circumstances:

  • At any time after the expiration of three years from the date of the grant of the patent, any person interested makes an application to the Indian Patent Office (IPO) for a grant of a compulsory licence on patent any of the following grounds:
    1. that the reasonable requirements of the public with respect to the patent invention not been satisfied;
    2. that the patented invention is not available to the public at a reasonably affordable price; or
    3. that the patented invention is not worked in the territory of India;
  • the Central Government is satisfied, in national emergency or in circumstances of extreme urgency or in case of public non-commercial use, that it is necessary that CL should be granted it may make a declaration to that effect, by notification; and
  • it is required to manufacture and export the patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector to address public health problems provided the CL has been granted by such country or such country has, by notification or otherwise, allowed the importation of the patented drug from India.

A proceeding for patent infringement can be brought by a patentee or a holder of an exclusive licence.

Further, the holder of a CL is entitled to call upon the patentee to bring such proceedings. If the patentee refuses or neglects to do so within two months after being called upon, they may institute proceedings in their own name making the patentee a defendant.

The court may grant a relief that may include an injunction and, on the request of the plaintiff, either damages or an account of profits. The court may also order that the goods which are found to be infringing, and materials and implements used in the creation of the infringing goods, shall be seized, forfeited or destroyed, as the court deems fit under the circumstances of the case without payment of any compensation.

The invalidity of the suit patent is an available defence in the proceeding of infringement and can be invoked by filing a counter-claim by the defendant in a suit for infringement. 

There are no specific procedures available to a potential generic entrant to establish that what it proposes to do is lawful under patent law. However, any person may institute a suit for a declaration that their use of any process, or their making, use or sale of any article, does not or would not constitute an infringement of a claim of a patent if it is shown that: that the person applied in writing to the patentee or exclusive licensee for a written acknowledgment and furnished them with full particulars in writing of the process or article in question; and that the patentee or licensee has refused or neglected to give such an acknowledgment.

There is no patent-linkage in India and, therefore, clearing the way is not a requirement for generic market entry in India.

India has no specific legislation and procedures for dealing with the counterfeiting of drug and medical devices; see 3.9 Border Measures.

The Trademarks Act, 1999 (the TM Act), prohibits the registration of names of chemical elements or International Non-proprietary Names (INN) as trade marks in India. There are no restrictions under the TM Act to the import and distribution of non-counterfeit, genuine pharmaceutical or medical device products from other markets, regions or countries.

Although trade dress is not specifically mentioned under the TM Act, the definition of the trademark under the TM Act includes the "shape of goods, their packaging, and combination of colours". The aesthetics of any article or product of manufacture are protected and registered in India under the Designs Act, 2000 and Designs Rules, 2001.

There are no provisions for data exclusivity in India. Under the DC Rules, a “new drug” continues to be considered as a new drug for a period of four years from the date of its first approval or its inclusion in the Indian Pharmacopoeia, whichever is earlier. An applicant for a new drug is required to conduct extensive testing and clinical trials for obtaining market authorisation. Therefore, an application for manufacturing generic versions of a "new drug" during the four-year period is required to contain clinical trial data.

Obhan & Associates

N - 94, Second Floor
Panchshila Park
New Delhi 110017
India

+91 11 4020 0200

+91 11 4020 0299

charul.yadav@obhans.com www.obhanandassociates.com
Author Business Card

Law and Practice

Authors



Obhan & Associates is a professionally managed law firm with a well-established practice in the area of IP and corporate laws. The firm was established in 2007 and has offices in Delhi and Pune. The firm has been recognised for its expertise in patent, trade mark, copyright and design protection. The corporate practice of the firm offers a broad range of transactional and advisory services to institutions, entrepreneurs as well as public and private companies. The firm has a well-balanced domestic and international clientele and represents a cross-section of industries, including fast-moving consumer goods, mechanical engineering, hardware and electronics, life sciences, pharmaceuticals, software, apparel, packaging and retail, process engineering, fashion brands, automobiles and parts, paints and chemicals, magazines and publications and textiles. The life sciences and pharmaceuticals team of the firm has six experienced patent agents and lawyers that serve a varied client base that includes individual inventors, universities and national and international corporations.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.