Last Updated on January 9, 2024 by The Health Master
The Department of Pharmaceuticals (DoP) has come out with the guidelines for the scheme for Assistance to Medical Device Clusters for Common Facilities (AMD-CF) with proposed financial outlay of Rs. 300 crore to offer financial assistance to strengthen the existing and new medical device clusters through creation of common infrastructure facilities.
The Scheme, with two sub-schemes, is expected to help in boosting the domestic manufacturing capacity and improving the quality of clusters for sustainable growth of the medical devices sector.
The scheme further intends to support central or state governments, institutions, or organisations to establish or strengthen the testing laboratories for medical devices to meet the needs arising due to the roll out of the licensing regime of the Medical Devices Rules (MDR), 2017.
The Scheme has two components or sub schemes – Assistance for Common Facilities (CF) and Assistance for Testing Facilities (TF) – and would be running for three years from 2023-24 to 2025-26. The tenure of the scheme is from the financial year 2023-24 to the financial year 2026-27.
Both the sub-schemes are designed to set up 12 common facilities and 12 testing laboratories, under which the common facilities will be supported with a financial assistance of Rs. 240 crore (Rs. 48 crore in the first year, Rs. 128 crore in the second and Rs 64 crore in the third year) for the common facilities and Rs. 60 crore (Rs. 18 crore for the first, Rs. 30 crore for the second and Rs. 12 crore for the third year) for the testing facilities.
Assistance for Common Facilities is planned to strengthen the medical devices clusters’ capacity for their sustained growth by creating common infrastructure facilities.
Medical devices manufacturing units in a cluster who have come together to form a Special Purpose Vehicle (SPV) to execute the project of developing common facilities and the clusters promoted by the State governments, are expected to benefit from the sub-scheme.
There shall be a minimum of five medical device manufacturing units as members of SPV. Clusters promoted by state governments may not need to form an SPV.
The SPV should have representatives from cluster members, financial institutions, state and central government and R&D organisations and the individual manufacturing unit cannot hold more than 40 per cent in the SPV. The Medical Devices enterprises shall hold at least 51 per cent equity of the SPV.
For Common Infrastructure Facilities for medical device clusters, the limit of support will be 70 per cent of the approved project cost or Rs. 20 crore, whichever is less, as per the approval of the Scheme Steering Committee (SSC).
In the case of Himalayan States and States in the NorthEast Region, the grant-in-aid would be Rs. 20 crore per Cluster or 90 per cent of the project cost of the CIF, whichever is less.
The grant will be released in instalments, with 30 per cent each released in the first, second and third instalment while the rest of the 10 per cent will be released at the fourth stage where the SPV has mobilised and spent its 100 per cent share in proportion of the first three grants.
The sub scheme is expected to have benefits including improvement in quality of medical devices, regulatory compliance specified for medical devices, increased availability of trained personnel for the clusters, increased competitiveness of units in the cluster and reduction in the manufacturing cost of the devices.
The sub scheme on assistance for Testing Facilities is aimed at strengthening availability of more Medical Device Testing Laboratories in order to boost manufacturing of quality medical devices, and national or state level government of private institutions interested to establish or strengthen testing facilities for medical devices to test Class A, B, C and D medical devices including in vitro diagnostic medical devices under MDR, 2017 can apply for the assistance.
Other legal entities which open a separate account for the funds to be utilised for the project assistance under the sub-scheme can also apply for the grant.
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, as per the approval of SSC.
In the case of Himalayan States and States in the North East Region, the grant-in-aid would be Rs. 5 crore per cluster or 90 per cent of the project cost of the CIF, whichever is less.
Any expenditure above the prescribed limit shall be borne by the selected applicant. The selection of beneficiaries shall be based on a first come first serve basis.
The guideline elaborates the modalities for utilisation of the incentive, including that while the cost of project shall include cost of land, building, internal infrastructure, administrative and management support expenses and margin money for working capital among others, the Grant-in-Aid from the DoP will not be utilised towards land component of the project or construction of rest house, administrative building or any other building, which are non-essential construction for the technical requirements of the project.
A minimum of 30 per cent of the approved project cost has to be contributed by the SPV as well for the project. The Common Facility may be utilised by the SPV members and also by other pharma units on user charges basis to be decided by the SPV.
The guideline proposes a Technical Committee constituted by the DoP to assist the SSC, which will have one representative each from the Central Drugs Standard Control Organisation (CDSCO), industry and academia, and ICMR, and two representative experts having knowledge and experience in the process development, R&D, product design, testing of medical devices or medical devices manufacturing from relevant institutes such as NIPER, IISc, IITs, Sree Chitra Thirunal Institute of Medical Sciences and Technology, and CSIR, among others.
The DoP will provide overall policy, coordination and management support for the implementation of the Scheme, while the proposals under the scheme will be considered for approval by the SSC, which will be headed by the Secretary of DoP as the Chairperson, and will have members including the Drugs Controller General of India, Financial Advisor of DoP, Joint Secretary (Schemes and Medical Devices), DoP, representatives of the Ministry of Micro, Small and Medium Enterprises (MSME), the Ministry of Electronics and Information Technology (MeitY), the Department for Promotion of Industry and Internal Trade (DPIIT), and the director or the deputy secretary (Schemes) of the DoP.
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