MTaI Welcomes Govt’s Global Tender Exemption for Medical Devices

The decision to exempt these medical devices from the local procurement clause followed a two-day extensive review process.

The Medical Technology Association of India (MTaI) has commended the Central government's recent initiative to release the Global Tender Enquiry (GTE) exemption list for medical devices. 

The decision, announced by the Department of Expenditure (DoE) on June 28, exempts 354 medical devices from the mandatory local procurement clause, allowing procurement agencies to issue global tenders for these devices.

Pavan Choudary, chairman of MTaI, lauded the government's effort, describing it as a groundbreaking move towards equitable policy-making ensuring access to quality medical products across India. 

“This is a path-breaking effort by the government towards equitable policy-making, spanning the crucial last mile which was uncovered so far," Choudary said. 

Choudary further emphasized that this initiative will benefit patients by ensuring continued access to high-quality medical devices until reliable domestic alternatives are available. 

He added that such a balanced approach will prevent substandard product launches, thereby maintaining India's reputation as a reliable manufacturing destination, which is crucial for boosting exports and encouraging foreign investment.

Thorough Review & Stakeholder Engagement

The decision to exempt these medical devices from the local procurement clause followed a two-day extensive review process. 

The review was conducted by a committee chaired by the secretary of the Department of Pharmaceuticals (DoP), with representatives from DoP, Central Drugs Standard Control Organisation (CDSCO), Directorate General of Health Services (DGHS), and All India Institute of Medical Sciences (AIIMS).

The DoP invited both global and local manufacturers to present supporting documents and justifications for their claims, leading to the finalization of the GTE exemption list. 

Over 100 representatives from various global and domestic medical technology companies participated in the review, presenting substantiated claims regarding the need for exemptions.

Balanced Outcomes & Future Implications

Choudary noted that the review process was thorough and impartial, resulting in a balanced outcome where some claims from all stakeholders were not accepted. 

He acknowledged that such rigorous scrutiny by a jury of experts and users is uncommon. He praised the government for going to great lengths to ensure fair policy-making that serves both the patients and the industry.

The Ministry of Health and Family Welfare (MoHFW) has been actively seeking exemptions from the General Financial Rules (GFR) for certain drugs and medical devices to facilitate their purchase through GTE. 

This approach helps ensure that high-quality products are procured when local alternatives are unavailable.

Enhancing Local Manufacturing

The DoP and MoHFW have been working to identify local manufacturers for various medical products. 

This will enable government procurement agencies, such as the Ministry of Railways and the Employees' State Insurance Corporation (ESIC), to include these local manufacturers in their procurement lists as per GFR stipulations. 

The aim is to support the local industry while also ensuring that necessary medical products are readily available.

In April 2023, the DoE had already exempted 364 medical devices and 70 drugs from the local procurement mandate, adding 15 more drugs to the list in December 2023. These exemptions are in place until March 31, 2024, allowing for global procurement when necessary.

Encouraging ‘Make in India’ with Strategic Exemptions

The DoP issued guidelines on December 30, 2020, to implement the Public Procurement (Preference to Make in India) Order, 2017. The guidelines encourage public procurement agencies to prioritize local suppliers for pharmaceutical formulations. 

The suppliers are classified into three categories: Class I (local content of 80% or more), Class II (local content between 50% and 80%), and non-local suppliers (local content of 50% or less).

However, in 2017, the DoE amended the GFR, recognizing that some products of the required quality and specifications may not be available domestically. 

This amendment empowers ministries and departments to seek global tenders when necessary, ensuring that competitive and suitable offers are considered. 

The amendment also specifies that no GTE shall be invited for tenders below INR 200 Cr unless special circumstances warrant a global search, in which case detailed justification and prior approval from the competent authority are required.