The Rozy View: Medtechs, Negotiate With India’s Regulators And Don't Give Up On Japan

Late to the regulatory game India's government authorities may be, but device companies need to be on their toes to not lose out on vast future market opportunities as the "Make in India" program takes shape. That is the view of international device regulatory and market access expert Ed Rozynski. And while India is on the up, is Japan losing its attractiveness?

For decades, India did not bother to regulate medical devices (except for a handful of higher-risk products) and allowed free pricing for devices.

Since more than 75% of medical device used in India are imported from the US and Europe, foreign firms have enjoyed free and open access to India’s growing and now large market for medical devices. However, within the last six months, India has introduced a broad-based regulatory scheme which will create third-party review for many medical devices and quality-system inspections too.

Higher risk devices will still be subject to governmental review. The new regulations will take effect on January 1, 2018 with additional changes or adjustments likely. (Also see "Asia Reg Roundup: Malaysia, Vietnam & India Speed Ahead In 2017" - Medtech Insight, 3 Mar, 2017.) In addition, after four years of jawboning with the industry about the end of free pricing, India’s drug pricing agency set price caps for a few devices including drug-eluting stents (DES) and bare metal stents at 25% to 50% below what those devices had been selling for on the Indian market. (Also see "India's Stent Price Slash Creating Climate Of Fear, Foreign Device-Makers Say" - Medtech Insight, 15 Mar, 2017.)

While some aspects of India’s new regulations are crude and/or unfair, such as setting price caps for DES below the purchase price of existing stocks, India is actually late to the game both for regulating devices and for imposing a form of price controls on medical technology.

Ed Rozynski

Having negotiated with India to reduce its import tariffs on medical devices in 2004, I found it is better to come to an agreement with Indian authorities than to be obstinate and then cry foul when the government imposes its new rules.

As industry has learned elsewhere, industry benefits from reasonable regulations designed to improve safety and quality. It’s time to work out a deal with India to avoid the closing of its large and growing market under its new “Make in India” program.

Has The Japanese Market Lost Its Luster For Device Firms?

Every few years a new published article claims that Japan’s market for medical devices has lost its luster and that firms are moving onto the faster-growing, up-and-coming markets of Asia.

While medical device firms have been heavily investing in other parts of Asia, Japan’s market for medical technology, for now, is still greater than the combined size of the Chinese, Indian and South Korean medical device markets by any meaningful (financial) measure.

Historically, the biggest impediment to entering the Japanese market has been the relatively high barriers to entry compared to the other emerging markets of Asia. But once inside Japan’s large device market, it is still an attractive and profitable place to do business.

Ironically, as the other big markets of Asia – India and China – raise their barriers to entry in the form of new regulations and price controls (see above) and, I would add, political risk, it may become harder to justify by-passing Japan for countries looking to promote and protect their own emerging medical device industry.

Until such policies “shake out” a bit more elsewhere in Asia, Japan will remain the large and stable “bird in the hand”.

Ed Rozynski ([email protected]), senior advisor to medical device corporations, trade associations and government, is based at the Medical Device Manufacturers Association (MDMA), in Washington, DC.