IMPORT OF LIFE SAVING DRUGS,

MEDICINES AND EQUIPMENTS.

Publisher: sidharthkapil@yahoo.com

SIIB
 INTRODUCTION
• Growth of Indian medicine and medical equipment
market
• Import of same
• India: Geographic location
: Population
: natural disasters
• affordability by patients, increased awareness on
health care, improved hospital infrastructure are
primary drivers boosting growth of this industry.
 IMPORTS OF MEDICINES AND
MEDICAL EQUIPMENTS IN INDIA

• There are around 250 types of medicines

imported in India for different types of
diseases, especially related to cardiac,
neurotic, ophthalmic, orthopedic, AIDS, etc.
• There are different range of equipments
varying from instruments and appliances used
in medical, surgical, dental and veterinary
sciences that are imported to India.
TRENDS OF IMPORT OF MEDICINES IN
INDIA

Value in Rs.

30,000.00

25,000.00

20,000.00

15,000.00 Value in Rs.

10,000.00

5,000.00

0.00
2004-05 2005-06 2006-07 2007-08 2008-09
TRENDS OF IMPORT OF MEDICAL
EQUIPMENTS IN INDIA
Value

3,000.00

2,500.00

2,000.00
Value
1,500.00

1,000.00

500.00

0.00
2004-05 2005-06 2006-07 2007-08 2008-09
 CLASSIFICATION OF MEDICAL
EQUIPMENTS
• Schedule M-III, divides medical devices
divided into four classes - A, B, C, and D;
according to their risk level.

Class A- includes low risk devices such as
thermometers.

Class B- include slow to moderate risk devices like
hypodermic needles will fall under.

Class C- covers moderate to high risk devices like lung
ventilators

Class D-high risk devices like heart valves and
pacemakers.
MEDICAL EQUIPMENTS & DEVICES
 Need for importing medical
equipments
Medical tourism on the rise

*Google search of “India medical tourism” turns up

more than two million results.
 Need for importing medical
equipments
Joint study by the Confederation of Indian
Industry and McKinsey.
Growth Trend
2500
2000
2000
Revenue 1500
(in Million Revenue Generated
1000
USD)
500 350
Linear (Revenue
0
Generated)
Year 2006 Year
2012(Projected)
Year
 Need for importing medical
equipments
Growth trend of Medical Tourists treated in Indian
Facilities

1200 1072
1000
No. of Medical 800
tourists 549
600
treated Series 1
(in 1000s) 400
180
200
10
0

Year
 Import Incentives on medical
equipments
• Incentives given by Government

Lower Import Duties

Higher depreciation on life-saving medical
equipment (i.e. 40% from 25%)
 DECISION MAKING FOR PURCHASING
• Govt. authorize both Govt. owned and Private
hospitals to issue global tenders.
• Govt. Tender has two parts:
Govt.
tender

Technical Commercial
Bid Bid

• Disadvantage: Time consuming, based on

lowest bidder
 DECISION MAKING FOR PURCHASING
• Private hospitals evaluate products based on:

Technology

Cost

price.
 AGENT ROLE IN IMPORT
• Exporter maintain technically trained Indian
distributor/agent.
• Agent must offer service support for medical
equipments and maintain public relations.
• Obtaining information regarding potential
business, handle trade promotion activities.
• Keeping foreign supplier informed of the local
market informed of local market
opportunities.
 CUSTOM DUTY ECONOMICS
• Custom duty levied on imported medical devices.
• Duty levied depends on product classification and
end user.
• Reduced duty examples:
1) Product classified by Ministry of Health as “life
saving medical equipment”.
2) Government hospitals/institutions – if
imported directly from manufacturer.

(Source: http://www.trade.gov)
 Regulation
• Authority regulating medical devices – Central Drug
Standard Control Organization (CDSCO), Ministry of
Health.
• Lays down rules, standards and approves import and
manufacturing of drugs, diagnostics, devices, and
cosmetics.
• Normally FDA and CE approved products are preferred
because of better quality and performance.
• But, price sensitivity comes into picture.
• Acc. to Govt. Notification, both manufacturer and
importer have to register with CDSCO.
 Regulation (contd…)
• To register a new or non FDA/CE approved
medical devices in India, an application has to
be submitted to the regulatory authority along
with documents:
Details of the regulatory status in other countries.
Restrictions of use in approved countries.
Free sale certificate from the country of origin.
 IMPORT PROCEDEURE
• Step1. Exporter provides the proforma invoice
stating the offer price (Insurance and Freight).
• Step2. After agreeing on mode of payment,
either L/C or wire transfer of funds, importer
places order.
• Step3. Exporter either ships the consignment
or uses airfreight.
• Step4. Importer or CCA responsible for
clearing the goods after payment of duties.
 IMPORT PROCEDEURE (Contd…)
• Step5. Bill of entry is submitted in four copies.
On the bill of entry, the purpose for which the
device will be used is mentioned.
– Other documents required along with Bill of Entry
are:
 Signed Invoice
 Packing list
 Bill of lading or Delivery order/Airway Bill
 GATT declaration form duly filled in
 Importers/Clearing House(agents) declaration
 IMPORT PROCEDEURE (Contd…)
 License (wherever necessary)
 Letter of Credit/Bank Draft(wherever necessary)
 Insurance document
 Import license
 Industrial License (if required)
 Test report in case of chemicals
 Catalogue, Technical write up, Literature in case of
machineries, spares or chemicals as may be
applicable
 IMPORT PROCEDEURE (Contd…)
 Separately split up value of spares, components
machineries
 Certificate of Origin* (if preferential rate of duty is
claimed)
* Certificate of origin is not an essential document for all
imports (earlier it was mandatory) but it is still a preferred
document in order to expedite clearances.
• Step 6. Consignment is sent to the appraising
section of the Customs House for assessment
and payment of duty.
 IMPORT PROCEDEURE (Contd…)
• Step7. After the assessment of the duty
liability, the importer has to deposit the duty
calculated with the treasury or the nominated
banks.
• Step8. Obtain delivery of the goods from the
custodians.
DRUGS/VACCINES
 IMPORT INCENTIVES ON DRUGS
• Life saving drugs and medicine (except restricted) -
imported free of custom duty.

• An individual or importer is also not required for any import

license and the item can be imported registered courier as
well.
• Certificate required can be issued by the Directors of Health
of State Govt. or District MO/Civil Surgeons.

• Customs Notification No. 21/2002-, dated 1.3.2002 exempt:

• specified life saving drugs, medicines including their salts
and esters and specified diagnostic test kits from the whole
of basic customs and additional customs duties subject to
certain conditions.
(Source: http://indiabudget.nic.in/ub2003-04/cen/exnotecus.pdf)
 DRUG FORM SAMPLE
Certificate No. ------------ Of ----------------- (years)
Certified that the drug/medicine-----------------------
---------(name of the drug/medicine)
being imported by ------------------------------- is a life
saving drugs/medicine and exemption for the
payment of customs duty is recommended.
Signature with date of Director General/Deputy
Director General/Assistant
Director General, Health Services,
New Delhi or
Director of Health Services or
District Medical Officer/Civil Surgeon
 122-A. Application for permission to
import New Drug
• (1) (a) No new drug shall be imported, without the the
Licensing Authority .
• (b) An application for grant of permission to import a new
drug shall be made in Form 44 to the Licensing Authority,
accompanied by a fee of fifty thousand rupees.

• Requires the results of local clinical trials carried out in

accordance with the guidelines specified .

• The Licensing Authority, after being satisfied that the drug if

permitted to be imported as raw material (bulk drug
substance) or as finished formulation shall be effective and
safe for use in the country, may issue an import permission in
Form 45 and/or Form 45 A.
Imports Of Drugs For Personal Use
• Small quantities of drugs, the imports of which is otherwise
prohibited under Section 10 of the Act, may be imported for
personal use subject tope the following conditions : (i) The
drugs shall form part of a passenger's bona fide baggage and
shall be the property of, and be intended for, the exclusive
personal use of the passenger,

(ii) The drugs shall be declared to the Customs authorities if

they so direct

(iii) The quantity of any single drug so imported shall not

exceed one hundred average doses
• FORM 12-A
[See Rule 36, Second Provison]
Application for the issue of a permit to import small
quantities of
drugs for personal useI……………………………………….… resident
of…………………………………. by occupation ……………………….

hereby apply for a permit to import the drugs specified below

for personal use

from………………………………………………………………………………………
…

I attach a prescription from a registered medical practitioner

in regard to the need for the said drugs. Name of
DrugsQuantities Date………………………Signature……………
……………
 VARIOUS FORMS USED IN IMPORT OF
DRUGS
FORM Purpose
FORM 8 Application for licence to import drugs (excluding those specified in
Schedule X) to the Drugs and Cosmetics Rules, 1945.
FORM 8-A Application for licence to import drugs specified in Schedule X to the Drugs
and Cosmetics Rules, 1945
FORM 9 Form of undertaking to accompany an application for an import licence
FORM 10 Licence given to import drugs (excluding those specified in Schedule X) to
the Drugs and Cosmetic Rules, 1945
FORM 10-A Licence to import drugs specified in Schedule X to the Drugs and Cosmetic
Rules, 1945
Form 11 Licence to import drugs for the purpose of examination, test or analysis
Form 12 Application for licence to import drugs for purpose of examination, test or
analysis
FORM 12-AA Application for licence to import small quantities of new drugs by a
Government Hospital or Autonomous Medical Institution

Source: http://cdsco.nic.in/html/importdrugs.htm
 Central Drug Standard Control
Organization

• CDSCO is the leading organization in India responsible for

quality control of the drugs and medicine imported in India.

• Central Drug Standard Control Organization is also the

licensing authority for the approval of new drugs proposed to
be imported as well as the amount of drugs to be imported.

• The CDSCO functions from 4 zonal offices, 3 sub-zonal offices

besides 7 port offices. The four Central Drug Laboratories
carry out tests of samples of specific classes of drugs.
PARALLEL IMPORTS
Parallel Import of Pharmaceuticals
• 'Parallel trade' or 'grey market trade' is trade without the
authorization of the person holding patent rights in the goods.
• Basis of parallel trade: Differential Pricing
• Indian Patient Law:
• The law provided that the grant of a patent shall be subject,
among other things, to the following:
"In the case of a patent with respect to any medicine or drug,
the medicine or drug may be imported by the government for
the purposes merely of its own use or for distribution in any
dispensary, hospital or other medical institution maintained by
or on behalf of the government .”
• The Patents (Amendment) Act (2002)
– recognized parallel importation by individual and
private entities for commercial purposes
– Section 107A(b) allowed importation by any
person “from any person who is duly authorized
by the patentee to sell or distribute the product".
– Phrase replaced by “from a person who is duly
authorized under the law to produce and sell or
distribute the product”.
• Therefore, Section 107A(b), as amended, provides:
– “Importation of patented products by any person from a
person who is duly authorized under the law to produce
and sell or distribute the product does not constitute
infringement of the patent.“
– Implications:
• In India, pharmaceutical products can be imported from any
voluntary licensee as well as the compulsory licensee of the patent
holder.
• Pharmaceutical products patented in India but not in an export
country can be legally imported into India.
 Compulsory Licensing and accessibility of
life saving drugs in third world countries
• Practice by a government of authorising itself
or third parties to use the subject matter of a
patent without the authorisation of
patent holder for reasons of public policy.
• Increases the accessibility and affordability of
life saving drugs
• Aims to promote public health and aims to
accessibility of high expensive drugs
• Opposition by multi national pharmaceutical
companies.
• Indian situation: Pharmaceutical companies in
India are demanding to grant that they be
granted compulsory licencing for many life
saving drugs
• The Controversy
Import Data for Drugs/Vaccines

Courtesy: Ministry of commerce Data bank, Govt. of India

 ITC-HS DRUGS CATEGORY
ITC – HS code Commodity Description
30 PHARMACEUTICAL PRODUCTS
3001 GLANDS & OTR ORGNS,DRD,W/N PWDRD
& EXTRCTSTHROF/OF THR SCRTNC FOR
ORGNOTHERPEUTC USEE.G. HEPARIN &
ITS SALTS ETC.
3002 HUMN,ANML & OTHR BLD FR MDCNL
USE; MDFD IMUNLGCL PRDTS W/N BY
BITECH PROCES;VCCNS,TXNS,CLTRS OF
MCRORGNSM & SMLR PRDCT
300210 ANTSRA & OTHR BLD FRCTN;MDFD
IMUNLGCL PRDTS W/N BY BITECHNOLGCL
PRCES
300220 VACCINES FOR HUMAN MEDICINE
 ITC-HS codes dropped/reallocated
• ITC – HS codes for following commodities are either dropped or re-
allocated from April 2003
ITC – HS code Commodity Description
30022001 VACCINES FOR CHOLERA
30022002 VACCINES FR DPTHRA(DPTHRA TXD-FT,APT ETC
30022003 VACCINES FOR POLIO
30022004 MIXED VACCINES FR T.A.B. OR T.A.B.C.
30022006 VACCINES FOR TUBERCULINS(B.C.G.)
30022007 VACCINES FOR WHOOPING COUGH (PERTUSIS)
30022008 MIXED VACCINES FOR DPT-TRIPLE ANTI GEN
30022009 OTHER HUMAN VACCINESG
 ITC_HS codes currently in Use for Vaccines for
humans
Category Code: 300220 Category Name: VACCINES FOR HUMAN MEDICINE

ITC – HS code Commodity Description

30022011 VACCINES FOR CHOLERA AND TYPHOID
30022012 VACCINES FOR HEPATITIS
30022014 VACCINES FOR POLIO
30022015 VACCINES FOR TUBERCULINS(B.C.G.)
30022016 ANTI RABIES VACCINE
30022017 VACCINE FOR JAPANESE ENCEPHALITIS
30022018 VACCINES FOR WHOOPING COUGH (PERTUSIS)
30022019 OTHER SINGLE VACCINE
30022021 MIXED VACCINES FOR DPT-TRIPLE ANTI GEN
30022022 MIXED VACCINES FOR DIPHTHERIA AND TETANUS
30022023 MIXED VACCINES FOR M.M.R.
30022024 MIXED VACCINES FR T.A.B. OR T.A.B.C.
30022029 OTHER MIXED VACCINE
 Commodity Code: 30022011
Commodity Name: VACCINES FOR CHOLERA AND TYPHOID
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
FRANCE 93.83 CHINA P RP 34.17
CHINA P RP 55.22 BELGIUM 9.14
GERMANY 1.18
BELGIUM

Country 2006-2007 Country 2005-2006

GERMANY 1,270.73 BELGIUM 1,528.36
FRANCE 40.59 UNSPECIFIED 416.93
USA 2.97 INDONESIA 67.92
VIETNAM SOC REP 11.58
 Commodity Code: 30022012
Commodity Name: VACCINES FOR HEPATITIS
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
BELGIUM 863.66 BELGIUM 950.98
KOREA RP 528.13 SWITZERLAND 475.2
SWITZERLAND 351.88 MEXICO 468.38
CHINA P RP 263.87 CHINA P RP 377.85

Country 2006-2007 Country 2005-2006

KOREA DP RP 428.1 KOREA RP 337.36
KOREA RP 337.36 CHINA P RP 214.34
CHINA P RP 214.34
CANADA 2.86
 Commodity Code: 30022014
Commodity Name: VACCINES FOR POLIO
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
ITALY 2,555.51 INDONESIA 3,913.74
BELGIUM 2,165.78 BELGIUM 1,772.76
INDONESIA 1,561.03 FRANCE 774.03
NETHERLAND 858.35 EGYPT A RP 203.17

Country 2006-2007 Country 2005-2006

GERMANY 3,431.49 BELGIUM 3,772.12
INDONESIA 3,370.71 GERMANY 795.2
BELGIUM 2,894.99 ITALY 488.09
ITALY 1,104.68 INDONESIA 17.03
 Commodity Code: 30022015
Commodity Name: VACCINES FOR TUBERCULINS(B.C.G.)
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
DENMARK 0.37

Country 2006-2007 Country 2005-2006

UK 0.14
 Commodity Code: 30022016
Commodity Name: ANTI RABIES VACCINE
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
GERMANY 148.12 GERMANY 165.8
CHINA P RP 120.83 CHINA P RP 60.6
ISRAEL 26.98 ISRAEL 50.63
UK 1.73 UK 2.97

Country 2006-2007 Country 2005-2006

GERMANY 176.15 FRANCE 572.5
ISRAEL 51.1 GERMANY 231.39
UK 23.98 UK 14.63
FRANCE 0.16
 Commodity Code: 30022017
Commodity Name: VACCINE FOR JAPANESE ENCEPHALITIS
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
KOREA RP 18.42 KOREA RP 23.96

Country 2006-2007 Country 2005-2006

VIETNAM SOC REP 383.8
KOREA RP 20.89
 Commodity Code: 30022018
Commodity Name: VACCINES FOR WHOOPING COUGH (PERTUSIS)
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
INDONESIA 26.46 UK 0.54

Country 2006-2007 Country 2005-2006

INDONESIA 1.65
 Commodity Code: 30022019
Commodity Name: OTHER SINGLE VACCINE
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
BELGIUM 3,478.02 FRANCE 2,041.88
USA 1,524.26 GERMANY 896.6
FRANCE 1,401.32 JAPAN 483.64
INDONESIA 865.94 USA 444.88

Country 2006-2007 Country 2005-2006

FRANCE 1,295.27 FRANCE 1,232.13
USA 1,294.80 GERMANY 605.93
GERMANY 305.02 CHINA P RP 458.81
CANADA 280.51 BELGIUM 417.09
 Commodity Code: 30022021
Commodity Name: MIXED VACCINES FOR DPT-TRIPLE ANTI GEN
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
USA 0.41 UK 3.64
BELGIUM 0.54

Country 2006-2007 Country 2005-2006

INDONESIA 7.86
 Commodity Code: 30022022
Commodity Name: MIXED VACCINES FOR DIPHTHERIA AND TETANUS
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
ITALY 32.15
KOREA RP 0.25

Country 2006-2007 Country 2005-2006

UK 1.71 INDONESIA 5.3
 Commodity Code: 30022023
Commodity Name: MIXED VACCINES FOR M.M.R.
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
BELGIUM 677.23 BELGIUM 217.77
USA 2.74
CROATIA 0.82
UK 0.17

Country 2006-2007 Country 2005-2006

USA 522.57 CROATIA 0.12
CROATIA 57.16
 Commodity Code: 30022024
Commodity Name: MIXED VACCINES FR T.A.B. OR T.A.B.C.
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
BELGIUM 16.8

Country 2006-2007 Country 2005-2006

FRANCE 12.71
 Commodity Code: 30022029
Commodity Name: OTHER MIXED VACCINE
All Values in Rs. Lacs
Country 2008-2009(Apr-Dec) Country 2007-2008
BELGIUM 3,910.36 BELGIUM 3,291.31
FRANCE 1,435.68 CANADA 483.29
CHINA P RP 314.25 FRANCE 204.28
CANADA 242.84 USA 6.89

Country 2006-2007 Country 2005-2006

BELGIUM 5,679.86 BELGIUM 1,559.53
CANADA 266.69 CHINA P RP 0.79
FRANCE 142.41
JAPAN 76.81
Import Data for Medical, Surgical
and Dental Equipments

Courtesy: Ministry of commerce Data bank, Govt. of India

 Commodity Code: 901812
Commodity : ULTRASONIC SCANING APARATUS

(All Values in Rs. Lacs)

Country 2008-09 Country 2007-08

USA 6,427.38 USA 6240.95
KOREA 3106.31 KOREA 3081.86
JAPAN 3048.49 JAPAN 2489.34
CHINA 2499.85 CHINA 2188.34

Country 2006-07 Country 2005-06

USA 5217.88 USA 5392.49
GERMANY 4625.84 JAPAN 3705.73
JAPAN 4101.74 KOREA 3246.25
KOREA 2817.79 AUSTRIA 2186.01
 Commodity Code: 902221
Commodity : APPARATUS BASED ON USE OF ALPHA,BETA/GAMMA RADTNS FOR
MEDICAL, SURGICAL,DENTAL/VETERINARY USEINCL RADIOGRAPHY/RADIOTHERAPY
APPARATUS
(All Values in Rs. Lacs)
Country 2008-09 Country 2007-08
USA 1,793.39 USA 2,018.24
GERMANY 891.38 NETHERLAND 555.78
NETHERLAND 426.87 CANADA 542.39
ISRAEL 319.63 ISRAEL 486.52
CANADA 212.13 JAPAN 196.53

Country 2006-07 Country 2005-06

SWEDEN 1,951.16 USA 1,188.59
USA 1,922.77 NETHERLAND 308.38
UK 778.93 ISRAEL 199.32
CANADA 750.99 FRANCE 193.16
ISRAEL 537.13 CANADA 161.48
 Some reason ?????
• The most preferable suppliers of those
equipment into India are USA , CHINA ,
JAPAN.
• Because they involve high risk (such as
electro-cardiograph)
• They need to be a high quality.
Compulsory Licensing and accessibility of
life saving drugs in third world countries
• Practice by a government of authorising itself
or third parties to use the subject matter of a
patent without the authorisation of
patent holder for reasons of public policy.
• Increases the accessibility and affordability of
life saving drugs
• Aims to promote public health and aims to
accessibility of high expensive drugs
• Opposition by multi national pharmaceutical
companies.
• Indian situation: Pharmaceutical companies in
India are demanding to grant that they be
granted compulsory licencing for many life
saving drugs
• The Controversy
 Problems and Challenges in
Import of Life-Saving Drugs and
Equipments
Problems/ Challenges in Import Procedure:

• Registration of Drugs
• Data Uniformity
• Indian Standard
• Mode of Transportation
• Other
 Low R & D
 Lack of quality focus
Problem/ Challenges in Import of Life
saving Drugs:

• Negative feeling attached to ‘Made in India’

• Restriction by Law
• Spurious drug selling
• VAT on life Saving drugs
Problems/ Challenges in Import of
Equipments:

• Higher depreciation of life saving equipments

• Benefit earned by Private Importers
• Others
 Low number of hospital and staff
 Difficulty to source capital
 Bank credit
 Use of second hand or obsolete equipments
 CONCLUSION
• Need for well regulated system required to represent
India and meet the requirements of The World
Health Organization and United States.

• Indian Medical Devices market holds great prospect

for MNCs. With projected growth rates of 12-16
percent for the next five years, one cannot ignore
India's potential and vast market opportunity in the
years to come. Schedule M-III promises to ease the
process of marketing medical devices in India by
creating a standardized regulatory framework
market.