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The Department of Pharmaceuticals (DoP) has released the operational guidelines for the newly announced central sector scheme for Strengthening of Medical Device Industry (SMDI), aiming at providing the much needed thrust to address the unmet needs of the medical devices industry in the next three years.
The scheme, with an outlay of Rs. 500 crore and tenure of three years from Financial Year 2024-25 to FY 2026-27, is expected to have a multiplier effect in augmenting the domestic manufacturing capacities with significant reduction in imports, and to promote quality, human resource development, safety and efficacy of medical devices, and also enhance the depth of medical device value chains in the country.
With the launch of the new scheme, the existing two schemes of scheme for Development of Pharmaceutical Industries - Assistance to Medical Device Clusters for Common Facilities, and Human Resource Development in Medical Device Sector - were merged to the SMDI, with modification in the scheme guidelines and reduced financial outlay, detailed in the guidelines.
The DoP observes that despite the efforts over the last decade through schemes including the production linked incentive (PLI) scheme, the dependence on imports still continues to be around 70 per cent. To deepen the country's manufacturing capability along the value chains of different segments of medical devices, it is essential to incentivise domestic manufacturing of key components, raw materials and accessories along with medical devices under the list of devices for which exemption has been provided by the Department of Expenditure for Global Tender Enquiry (GTE) due to lack of domestic manufacturing to meet the procurement demand of the public hospitals, says the Department.
It is expecting the sub-scheme for Marginal Investment Scheme for Reducing Import Dependence under the SDMI, which incentivises the manufacturing of essential or key components or upstream materials or accessories or closely related products used in manufacturing of medical devices, through a grant.
Presently in respect of 354 medical devices, exemption from the instructions of Department of Expenditure for GTE for tenders of value below Rs. 200 crore is available owing to lack of domestic manufacturing of these devices to meet the requirement of procurement of central government hospitals. Marginal Investment Support for manufacturing of these medical devices within the country would lead to reduction in import of these items, expects the Department.
Selected applicants for the sub-scheme, with an outlay of Rs. 180 crore will be incentivized through one-time capital subsidy on reimbursement basis for manufacturing key components, raw materials, finished devices or accessories. For companies upto Rs. 250 crore turnover, 20 per cent of investment in the project or Rs. 10 crore, whichever is less will be granted. For companies between Rs. 250 crore to Rs. 1,000 crore turnover, 15 per cent investment or Rs. 10 crore, and for companies above Rs. 1,000 crore, 10 per cent of investment or Rs. 10 crore will be provided. Central/state government organizations will be supported with a grant of 20% of the investment in the eligible project or Rs. 10 crore, whichever is less. It aims to support 30 such facilities through the sub-scheme during the scheme period.
For the sub-scheme for common facilities for medical devices clusters, assistance will be provided for common facilities and testing facilities. This scheme will provide the grant-in-aid component of Rs. 20 crore or 70% of the total cost of purchase of equipment and machinery, for Central/state government funded entities (50% in respect of private entities) for use in setting up of common facilities, whichever is less and Rs. 5 crore or 70% for Central/state government funded entities (50% in respect of private entities) for setting up of testing facilities, whichever is less.
Plans are to provide support to five to 10 common facilities and four to eight testing labs with a total financial outlay of Rs. 110 crore. Out of this, Rs. 80 crore is allocated for common facilities and Rs. 30 crore for testing labs.
For testing facilities (TF) of medical device (MD) products, the limit of support will be 70% of the approved testing facilities project cost or Rs. 5 crore, whichever is less in case of state government funded entities and 50% of the approved testing facilities project cost or Rs. 5 crore, whichever is less, in case of private institution, as per the approval of Scheme Steering Committee. Any expenditure above the prescribed limit shall be borne by the selected applicant.
The sub-scheme for capacity building and skill development in medical device sector, is announced with main objective to fill the gap existing in the education and research in medical devices sector and to ensure quality teaching, training and nurturing excellence in medical technology education for generating critical mass of trained human resource to meet the requirements of rapidly innovating multidisciplinary areas of medical technology and create R&D ecosystem for the sector.
The expected beneficiaries include government universities/institutes offering postgraduate/PG diploma/graduate/diploma/certificate courses in medical devices, students willing to work in the medical device sector, and existing workforce (regulators/technicians) already working in the medical device sector. This has two components, Component A to support running post graduate courses in medical devices in existing institutes and Component B for capacity development in the sector including design, production and testing.
Financial assistance will be provided to Center government universities/institutes for running multidisciplinary post-graduate courses (advanced level) in medical devices with the objective of building infrastructure for education and research in medical devices and developing a skilled workforce adaptable to changing requirements of the medical device sector.
Under Component A, admission of the students will be made through competitive examination open to students from medical, engineering, IT and pharmaceutical backgrounds. The department will provide up to 75% of the cost of the course or Rs. 21 crore, whichever is lower, on reimbursement basis. The remaining 25% of the cost will have to be borne by the institute concerned.
Under Component B, financial assistance will be provided to the Central/state government universities/institutes and private institutions (approved by NCVET) for running diploma, certificate and short- term training courses for existing workforce (clinical technicians, regulators) of medical device industry, students from pharmacology, engineering, technology and medical background willing to work in medical device industry to equip them for the medical device sector and make them compatible with the requirements of the industry on reimbursement basis.
Financial support based on the number of students (Rs. 25,000/student/month for diploma and Rs. 10,000/student/month for certificate/skill development training programmes) will be provided to the trainee institute for the number of students enrolled. Plans are to support four to eight applicants under Component A and seven to 15 applicants under Component B.
For the sub-scheme of medical device clinical studies support scheme, the aim is to foster development of devices supported by clinical evidence and generation of clinical data that demonstrates the safety and efficacy of the devices manufactured in India, thus opening markets outside the country for the Indian industry.
The department will provide financial support in conducting clinical investigation, clinical performance evaluation, Post Market Follow-up Study, animal studies to the eligible applicants in the form of grant on reimbursement basis. For preclinical studies, Rs. 2 crore or 25 per cent of expenditure incurred, whichever is less, will be offered, for clinical investigation Rs. 5 crore or 25 per cent of expenditure incurred, whichever is less, for post market clinical follow-up, Rs. 1 crore or 25 per cent of the expenditure, whichever is less, and for performance evaluation of new in-vitro diagnostics devices, Rs. 1 crore or 25 per cent of expenditure, whichever is less. Plans are to support 30-60 applicants with a financial outlay of Rs. 100 crore, in three years.
Through the medical device promotion scheme, which aims at sharing of knowledge and conducting studies and awareness programmes and creation of databases, support will be provided to empanelled organisations and industry organisations, and to industry organisations to conduct seminars, workshops, investors' meet, among others.
A technical committee will be constituted by the DoP to technically appraise proposals received under different components of the scheme, provide technical guidance and recommendations to the SSC.
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