Central aid package to help medical device parks set up common facilities; Rs.100 crore budgeted for 2018-20
New medical device parks coming up in various states can avail a one-time financial assistance of up to Rs.25 crore to set up common facilities such as component testing units, electro-magnetic interference laboratories and radiation and sterilisation checking centres under a new scheme proposed by the Central government.
According to official sources, the scheme will be implemented through a one-time grant-in-aid to be released to a state implementing agency (SIA) set up for the purpose. The initiative is expected to help reduce the cost of production significantly at medical device parks and would be beneficial to new zones planned in Andhra Pradesh, Telangana, Tamil Nadu, Maharashtra and Gujarat.
The Department of Pharmaceuticals (DoP), which proposed the scheme, allocated Rs.100 crore for the initiative for the next two years. The maximum limit for the grant would be Rs.25 crore per medical device park common facility centre (CFC) or 70 per cent of its project cost, whichever is less.
The grant will be cleared by a Scheme Steering Committee (SSC) headed by the DoP secretary after screening the proposal. The CFC should go on stream within two years from the date of final approval.
A tripartite agreement should be entered into among the Central government, the state government concerned and the SIA for CFC projects. The SIA should be a legal entity set up by the state government for implementing the park project and responsible for its day-to-day management.
Of late, the government has been adopting strategies to promote localisation in the medical devices industry and the aid plan is the latest step in that direction. The new Medical Devices Rules, which came into effect in January, were introduced to remove regulatory bottlenecks in the government’s Make in India initiative and facilitate ease of doing business. The rules classify medical devices into Class A, B, C and D based on associated risks.
According to official data, the sector is valued at $5.2 billion and contributes 4-5 per cent to the health care industry. Currently, there are about 750–800 medical device manufacturers in the country, with an average investment of Rs.170–200 million and an average turnover of Rs.450–500 million.