INTRODUCTION
Over the past two months, significant strides have been made in reforming marketing practices within the pharmaceutical industry, alongside efforts to establish fair pricing frameworks for both drugs and medical devices. This period, much like previous ones, has seen continued emphasis on upholding good manufacturing practices. In this edition of 'Checking the Pulse,' we delve into key updates from February 2024 to March 2024 in the healthcare and pharmaceutical sectors, while also touching on noteworthy industry deals that have garnered attention.
RECENT LEGAL & REGULATORY DEVELOPMENTS
Draft Drugs (Amendment) Rules, 2024 released by Ministry of Ayush to amend Drugs Rules
On February 2, 2024, the Ministry of Ayush released the Draft Drugs (Amendment) Rules, 2024 ("Draft Drugs Rules")1 to amend the Drugs and Cosmetics Rules, 1945 ("Drugs Rules"). Pursuant to the Draft Drugs Rules: (a) all homoeopathic drug manufacturers will be required to mandatorily adopt good manufacturing practices; (b) definition of homoeopathic medicines will be revised to encompass established therapeutic efficacy and production methods aligned with official homoeopathic pharmacopoeias; and (c) most licenses and approvals will become perpetual, requiring self-declarations of adherence every 5 years.
Extension of transition period for laboratories to comply with new accreditation requirements
The National Accreditation Board for Laboratories ("NABL") has extended the transition period for accredited laboratories to comply with new accreditation requirements. The extension provides laboratories with an additional 8 months from December 31, 2023, until August 31, 2024.2 NABL, an autonomous body under the Quality Council of India, plays a vital role in ensuring the quality and reliability of laboratory services. It offers accreditation, based on international standards, to testing and calibration laboratories, including medical laboratories.
Nicaragua becomes first Spanish-speaking nation to recognise Indian pharma standards
Nicaragua has become the first Spanish-speaking nation to officially recognise the Indian Pharmacopoeia (i.e., the Indian pharmaceuticals standards). This development follows the signing of a Memorandum of Understanding on Pharmacopoeia Cooperation between the governments of India and Nicaragua.3
Government mulls bringing nutraceuticals under stricter scrutiny with CDSCO evaluation
The Indian government has formed a committee to evaluate whether nutraceuticals, currently regulated by the Food Safety and Standards Authority of India ("FSSAI"), should be brought under the purview of the Central Drugs Standard Control Organisation ("CDSCO").4 This move aims to ensure better control over health-related products. Currently, the FSSAI primarily regulates food and beverages, including nutraceuticals. However, concerns exist regarding the potential for interchangeable use of ingredients between nutraceuticals and pharmaceutical products.
Drugs manufacturing facilities cannot manufacture nutraceutical products in the same facility
The Drugs Controller General of India has directed the state drug licensing authorities to take action against the drug manufacturers who are also manufacturing nutraceuticals and health supplements in the same facility.5 Under the provisions of the Drugs and Cosmetics Act, 1940 ("Drugs Act"), a drug manufacturing facility cannot be used to manufacture food products.
Draft of Pharmacovigilance Guidance Document published for comments
The National Coordination Centre-Pharmacovigilance Programme of India ("NCC-PvPI"), Indian Pharmacopoeia Commission ("IPC") in collaboration with CDSCO, Ministry of Health & Family Welfare, Government of India has released a draft of the revised Pharmacovigilance Guidance Document for Marketing Authorization Holders ("MAH") of Pharmaceutical Products ("MAH Guidance Document") for comments.6 The MAH Guidance Document is a regulatory guidance document which has been prepared to: (a) facilitating submission of the safety profile of drugs by MAHs (i.e., manufacturer or the importer of the drug, who has valid manufacturing or import licence) involved in the manufacture, sale, import and distribution of pharmaceutical products in India; (b) providing assistance to MAHs on establishing and ensuring an effective pharmacovigilance system at their units; and (c) define the roles & responsibilities of CDSCO, state drugs controllers, NCC-PvPI, IPC and MAH in preparation of pharmacovigilance system master file, post marketing surveillance, preparation & submission of periodic safety update report, quality management system, audits and inspection of pharmacovigilance system and submission of risk management plan, wherever applicable. In the event of any dispute as regard to the content of the MAH Guidance Document and the Drugs Act and other applicable statutes, the statutory provisions will prevail over the MAH Guidance Document.
Draft guidance document on post approval changes in biological products
On February 28, 2024, the CDSCO published a draft guidance document on post approval changes in biological products ("Draft Guidance Document").7 Currently, the CDSCO has invited suggestions and comments from the stakeholders on the Draft Guidance Document. The Draft Guidance Document lays down guidelines for quality, safety, and efficacy assessment with an aim to align the standards of the biological products with the international guidelines and current international practices. The Draft Guidance Document would apply to the marketing authorisation holders who intend to make changes to biological products after such products have received an approval for being marketed.
As per the Draft Guidance Document, CDSCO has classified the post approval changes into four levels: (a) the first level being supplement changes which are major quality changes that have a substantial potential to have an adverse effect on the identity, strength, quality, purity, or potency of the biological product; (b) the second level being notifiable changes, which are moderate quality changes that have a moderate potential to have an adverse effect on the identity, strength, quality, purity or potency of the biological product; (c) the third level being an annual notification or minor quality changes that have minimal potential to have an adverse effect on the identity, strength, quality, purity or potency of the product; and (d) the fourth level changes are those which are not the other three levels of changes and are not expected to have an adverse effect on the strength, quality or other factors of the drug products.
The Draft Guidance Document further clarifies that while the first two levels of changes are not to be implemented for commercial purpose without approval from the CDSCO, the third level and fourth level changes may be implemented by the market authorisation holders without prior review by the CDSCO, except for cases of change in shelf life. Such changes, however, should be retained as part of the drug product's record and should comply with the requirements of good manufacturing practices.
Export policy amended for human biological samples
The Directorate General of Foreign Trade issued a notification on March 11, 2024, amending the export policy for human biological samples8. Under the revised policy, human biological samples that are covered under the Drugs Act and the Drugs Rules are allowed for export subject to obtaining a no objection certificate from the CDSCO. Additionally, human biological samples not covered under the aforementioned category are also allowed for export, subject to obtaining a no objection certificate from either the Indian Council of Medical Research or the Department of Health Research. This amendment is expected to streamline the export process for items containing human biological materials, ensuring compliance with regulatory authorities and to facilitate trade while maintaining adherence to relevant regulations and standards.9
Guidelines on Production Linked Incentive Scheme revised
The Department of Pharmaceuticals ("DoP") on March 12, 2024, updated the Guidelines for the Production Linked Incentive Scheme ("PLI Scheme")10 to revise the provisions concerning scheduled commercial operation date and invocation of bank guarantees. As per the revised provisions of the PLI Scheme, the competent authority (i.e., the Empowered Committee) can revise the scheduled commercial operation date for projects delayed beyond one year without cancelling their approval. Bank guarantees will now be invoked if projects are not commissioned by the revised scheduled commercial operation date. Additionally, if an applicant is selected for multiple eligible products, separate approval letters and bank guarantees are required for each product.
DoP constitutes committee to reform pricing framework for drugs and medical devices
On March 12, 2024, the Pricing Division, DoP issued an order for establishing a five-member committee to oversee drug and medical device pricing reforms. The aim to establish such a committee is to address reforms within the National Pharmaceutical Pricing Authority ("NPPA") and develop price moderation frameworks for medical devices and emerging therapies. The committee will also draft a new Drugs and Medical Devices (Control) Order within three months.11 The NPPA currently operates under the Drugs (Prices Control) Order, 2013, transitioning from cost-based to market based pricing in 2012. The NPPA sets ceiling prices for essential medicines and monitors non-scheduled medication prices to prevent excessive increases.
DoP releases new uniform code for pharmaceutical marketing practices
On March 12, 2024, the DoP issued a policy communication enclosing the Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024 ("Code") to be voluntarily adopted and complied by pharmaceutical companies/ body corporates with respect to marketing practices.12 The Code aims to regulate and monitor marketing practices and promotions of drugs and medical devices in an ethical manner. The Code covers critical areas such as conduct of medical representatives, provisions for brand reminders, regulating relationship between the pharmaceutical companies and healthcare professionals, and provisions for continued medical education. The DoP has requested all the associations formed by the pharmaceutical companies (at the national and regional level) to establish an ethics committee for pharmaceutical marketing practices, create a dedicated UCPMP portal on their websites and initiate necessary steps towards implementing the Code.
The Code, among other things, mandates that expenditure by the pharmaceutical industry on continuing medical education, continuing professional development, conference, workshop, etc., should only be through a well-defined, transparent, and verifiable set of guidelines and should not be conducted in foreign locations. Further, the Code has explicitly permitted pharma and medical devices companies to provide brand reminders (such as books, calendars, dummy device models, journals), value of which should not exceed Rs. 1000 per item and has also allowed free samples and other informational and educational items to be included in the category of brand reminders.13 The Code strictly prohibits pharmaceutical companies and their agents (i.e. distributors, wholesalers, retailers, etc.) from offering or providing gifts for personal benefit of any healthcare professionals or their family members (both immediate and extended). Similarly, it prohibits the offering, supplying, or promising of any pecuniary advantage or benefit in kind to any person qualified to prescribe or supply drugs. The Code also introduces an appeal mechanism allowing aggrieved parties to file an appeal with the Apex Committee for Pharma Marketing Practices (headed by the Secretary, DoP) in cases of disagreement with the decision of the ethics committee. The apex body may prescribe any penalties or refer to an appropriate government agency or authority.
DoP revises financial assistance scheme for drug companies
The DoP has revised the Pharmaceutical Technology Upgradation Assistance Scheme ("PTUAS") which extends financial assistance to drug companies for upgrading their manufacturing facilities to match with international standards.14 The PTUAS was adopted for providing intertest subvention to micro, small and medium ("MSME") scale pharma units which intend to upgrade their manufacturing facilities to attain WHO GMP norms (i.e., good manufacturing practices outlined by World Health Organization). Pursuant to the PTUAS, financial assistance will only be provided for procuring new machines that will be needed for attaining WHO GMP norms. The beneficiary pharma MSMEs to whom the benefit of interest subvention is extended must obtain the WHO-GMP certification within two and half years from the date of disbursement of loan.15
The PTUAS has been revised with an aim to support the pharmaceutical industry's compliance to WHO-GMP norms and the revised Schedule M (good manufacturing practices) of the Drugs Rules which came into effect from January 5, 2024. Through the revision, the DoP has broaden the eligibility criteria, and offers flexible financing options emphasizing subsidies on reimbursement basis over traditional credit-linked approach. It also offers a dynamic incentive structure and integration with state government schemes, enabling units to benefit from additional top-up assistance. The scope of PTUAS has also been extended to include pharma companies other than MSME pharma units. Under the revised scheme, the pharmaceutical manufacturing units having average turnover less than Rs. 500 crores over the last three years will get a maximum of Rs. 1 crore. The revised scheme is expected to support 300 units, with a total outlay of Rs. 300 crores, over the next two f iscal years (150 units each in 2024-25 and 2025-26).16
National Dental Commission Rules notified
The Ministry of Health and Family Welfare notified the National Dental Commission Rules, 2024 ("Dental Commission Rules") on March 14, 2024, paving the way for regulating dental education and profession in India. The Dental Commission Rules was notified for implementing the provisions of the National Dental Commission Act, 2023 ("Dental Commission Act"), certain provisions of which came into force on February 29, 2024.17 The Dental Commission Rules lay down procedure for appointment of part-time members to the commission. The commission will have a chairperson, 8 ex-officio members, and 24 part-time members. The Dental Commission Rules further prescribe the salary and allowances to be payable to the chairperson, part time members and whole-time members, appointment of secretary of commission and constituting a dental advisory council.18 The Dental Commission Rules also specify the functions of the dental commission such as: (a) undertaking study to reduce the cost of dental education in the country; (b) suggesting adoption of modern technology, intensive use of infrastructure, faculty sharing; (c) deciding the manner of hearing appeals; and (d) making regulations after consulting state governments and other stakeholders.
MAJOR DEALS IN INDIA IN THE PHARMA AND HEALTHCARE INDUSTRY
The following are the key deals announced during the months of February 2024 and March 2024, in the pharma and healthcare industry:19
Suven Pharmaceuticals to merge with Cohance Lifesciences
Suven Pharmaceuticals Limited ("Suven") and Cohance Lifesciences Limited ("Cohance") have announced a proposed merger scheme. Cohance is a leading Contract Development and Manufacturing Organization ("CDMO") known for its global leadership in low-mid volume molecules and unique capabilities in antibody drug conjugates. The merger strengthens Suven's CDMO industry position and offers growth opportunities. The merged platform will consist of three business units: (a) Pharma CDMO; (b) Speciality Chemicals CDMO; and (c) Active Pharmaceuticals Ingredients unit. Upon the scheme becoming effective, Cohance's shareholders will receive Suven's shares in a ratio of 11:295. The transaction is expected to conclude in 12-15 months, pending shareholder and regulatory approvals.20
Eris Lifesciences acquires Biocon Biologics
Eris Lifesciences Limited ("Eris") has acquired Biocon Biologics' branded formulations business in India for Rs. 1,242 crore (USD169 million). This move marks Eris' entry into India's injectables market and strengthens its position in the insulin segment. Additionally, the deal opens doors for Eris in the oncology and critical care industries. The collaboration also involves a 10-year supply agreement between Biocon Biologics Limited and Eris ensuring the continued production and supply of Biocon's products in India. The acquisition is set to be completed by April 15, 2024, and will be funded through debt.
Morgan Stanley PE to exit cardiac stent maker SMT
Morgan Stanley Private Equity Asia plans to divest its entire 17% stake in Sahajanand Medical Technologies ("SMT"), India's leading cardiac stents manufacturer, f ive years after its initial investment. Samara Capital and SMT's promoter Dhirajlal Kotadia and family are also expected to sell some of their stake in the company.22
"Hey Torus": A new super mobile application aims to revolutionize Indian healthcare with affordability and holistic approach
Torus Health has partnered with Tata 1mg to launch "Hey Torus", a comprehensive healthcare super mobile application aiming to revolutionize the Indian healthcare landscape.23 The mobile application offers affordable healthcare solutions through its partnership with the trusted brand, Tata 1mg, which boasts extensive reach across India. "Hey Torus" claims to go beyond traditional medicine, embracing a holistic approach that combines allopathy with naturopathy, ayurveda, and other natural therapies. Additionally, the mobile application plans to integrate health, wealth, and education in the future, offering patients not just treatment options but also lifestyle advice and resources for better overall health management.
Takeda and Biological E Partner to boost dengue vaccine production in India, targeting global impact
Takeda Pharmaceutical Company ("Takeda") and Biological E. Limited ("Biological") have entered into a strategic partnership to manufacture Takeda's dengue vaccine, TAK-003, in India.24 By leveraging Biological's manufacturing capabilities and Takeda's expertise, the collaboration aims to scale up production to potentially reach 50 million doses annually, significantly contributing to Takeda's goal of 100 million doses within the decade. The vaccine will be manufactured in Hyderabad, India, a hub for vaccine and biologics research and development.
Footnotes
1 https://sowarigpainstitute.in/admin/noti/617116263.251863_compressed.pdf
2 https://www.pharmabiz.com/NewsDetails.aspx?aid=166164&sid=1
6 https://ipc.gov.in/images/PV_Guidance_Docs_for_MAH_Version_2_as_ on_18.01.2024.pdf
7 The Guidance Document can be accessed at https://cdsco.gov.in/opencms/export/sites/CDSCO_WEB/Pdf-documents/dguideline.pdf
8 A human biological specimen is any material derived from a human such as blood, urine, tissues, organs, saliva, DNA/RNA, hair, nail clippings, or any other cells or fluids whether collected for research purposes or as residual specimens from diagnostic or therapeutic procedures or processes.
10 https://pharmaceuticals.gov.in/important-document/modifications guidelines-production-linked-incentive-scheme-promoting-domestic
11 https://pharmaceuticals.gov.in/sites/default/files/Reforms%20in%20the%20Pricing%20Framework_0.pdf
12 https://pharmaceuticals.gov.in/sites/default/files/UCPMP%202024%20for%20website_0.pdf
14 The notification revising the PTUAS can be accessed at https://pharmaceuticals.gov.in/sites/default/files/Guidelines%20PTUAS.pdf
15 The PTUAS can be accessed at https://pharmaceuticals.gov.in/sites/default/f iles/Pharmaceutical%20Technology%20Upgradation%20Assistance%20Scheme%20%28PTUAS%29.pdf
16 https://www.expresspharma.in/dop-amends-ptuas-expands-eligibility criteria-to-include-msmes/
17 https://egazette.gov.in/(S(bvu0jcudyypqu0bunlbxj3fw))/ViewPDF.aspx
18 https://egazette.gov.in/(S(bvu0jcudyypqu0bunlbxj3fw))/ViewPDF.aspx
19 To the extent any transactions involve clients of INDUSLAW, the information herein is based on statements in the media and not our professional knowledge of the relevant transaction.
24 https://www.businesstoday.in/industry/pharma/story/takeda-and-biological e-partner-to-boost-dengue-vaccine-production-in-india-419261-2024 02-28#:~:text=The%20partnership%20is%20expected%20to,million%20 doses%20within%20this%20decade.
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