Overview

Healthcare funding

In general terms, how is healthcare, including access to medicines and medical devices, funded in your jurisdiction? Outline the roles of the public and private sectors.

The government of India, through its Ayushman Bharat – National Heath Protection Mission, proposes to cover 100 million poor families (included deprived rural families and identified categories of urban workers) for up to Rs500,000 per annum. The central government, in partnership with Niti Aayog (a government policy think tank), will transfer funds to the State Health Agency through the Ayushman Bharat mission. 

Under another scheme called Rashtriya Arogya Nidhi (RAN), the central government provides financial assistance to patients below the poverty line suffering from life-threatening diseases. The government funds up to Rs5 million to 13 government-run hospitals/institutes to pay up to Rs200,000 in treatment in each case.

Under the Health Minister’s Discretionary Grant, families with an annual income up to Rs25,000 are eligible for medical assistance whereby some part of the treatment is defrayed as part of expenditure on treatment in government hospitals.

Under the Health Minister’s Cancer Patient Fund, a corpus fund of Rs1 billion is set up as a fixed deposit for financial assistance for patients suffering from cancer who are below the poverty line. The financial assistance is provided to patients seeking treatment in 27 Regional Cancer Centres.

The Department of Pharmaceuticals also launched a scheme called Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana Kendra to provide generic medicines at affordable prices.

The Ministry of Health and Family Welfare provides a National List of Essential Medicines of India to ensure that all the drugs available are affordable (Drug Price Control Order 2013 issued under Section 3 of the Essential Commodities Act 1955 (based on the National Pharmaceutical Pricing Policy 2012).

The Ministry of Health and Family Welfare provides and funds various other national health insurance schemes, including:

  • Rashtiya Swasthiya Bima Yojana, which provides insurance for families below the poverty line;
  • The Employment State Insurance Scheme, which provides socio-economic protection to worker population and their dependents by providing full medical care to them;
  • The Central Government Health Scheme, which provides healthcare facilities for the central government employees and their dependents;
  • Janashree Bima Yojana, which covers 45 occupational groups and provides life insurance protection to people below the poverty or marginal poverty line; and
  • The Universal Health Insurance Scheme, which provides for reimbursement of medical expenses up to Rs30,000 in various circumstances; the scheme is specifically designed for families below the poverty line and is provided by the four public sector general insurance companies.
Delivery

In general terms, how is healthcare delivered in your jurisdiction? Outline the roles of the public and private sectors.

Healthcare in India is delivered through both the public and the private sector. The public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centres (PHCs) in rural areas. The private sector provides the majority of secondary tertiary and quaternary care institutions with a major concentration in metro cities (Source: National Health Profile 2019, Central Bureau of Health Intelligence).

The services provided by the private sector are registered and regulated under national/state councils constituted under the Clinical Establishment Act, while the public sector comes under the authority of the Ministry of Health and Family Welfare. Over 70% of ailments are treated in the private sector in India, which clearly shows that the private sector has a major role to play in the country’s healthcare system (Source: NSS 2014, Ministry of Statistics and Programme Implementation).

Key legislation

Identify the key legislation governing the delivery of healthcare and establishing the regulatory framework.

  • Clinical Establishments Act 2010;
  • Red Cross Society (Allocation of Property) Act 1939;
  • Indian Medical Council Act 1956;
  • Indian Medical Council (professional conduct, etiquette and ethics) Regulations 2002;
  • Indian Medical Degrees Act;
  • Registration of medical practitioners with state medical councils;
  • Indian Nursing Council Act 1947;
  • Dentists Act 1948;
  • Dental Council of India Regulations 2006;
  • Drugs and Cosmetic Act 1940;
  • Drug and Cosmetic Rules (Amendment 2005) 1945;
  • Drugs Control Act 1950;
  • Pharmacy Act 1948;
  • Narcotics Drugs and Psychotropic Substances Act 1985;
  • Central Excise Act (for permit to use and store spirit) 1944;
  • Indian Penal Code 1860;
  • Homoeopathy Central Council Act 1973;
  • Drugs and Magic Remedies (objectionable) Advertisements Act 1954;
  • Pre-Conception and Pre-Natal Diagnostic Techniques Act 1994;
  • Medical Termination of Pregnancy Act 1997;
  • Transplantation of Human Organ Act and Rules 1994;
  • Indian Lunacy Act 1912;
  • The Epidemic Disease Act 1897;
  • Lepers Act 1975;
  • Guardians and Wards Act 1890;
  • National Guidelines for clinical management of HIV/AIDS, NACO, Government of India;
  • Manual for Control of Hospital Associated infections: SOPs, NACO, Government of India;
  • The Mental Health Act 1987; 
  • Protection of Human Rights Act 1993;
  • Maternity Benefit (Amendment) Act 2008;
  • ICMR rules governing Medical Research;
  • Bio- Medical Waste (Management and Handling) Rules 1998;
  • The Medical Devices Rules 2018;
  • Uniform Code of Pharmaceutical Marketing Practices 2014; and
  • National Medical Council Act 2019.
Responsible agencies

Which agencies are principally responsible for the enforcement of laws and rules applicable to the delivery of healthcare?

The Ministry of Health and Family Welfare at the national level and the State Department of Health and Family Welfare with broader divisions at the regional and/or zonal level are responsible for the enforcement of laws and rules for the delivery of healthcare. The National Council for Clinical Establishments ruled that all the laws under the Clinical Establishments Act 2010 must be complied with. The National Medical Commission regulates medical education and practice, as well as the Central Drugs Standard Control Organisation to discharge and regulate functions under the Drugs and Cosmetics Act. Both organisations are funded by the Ministry of Health and Family Welfare by way of central schemes. The courts in India can also enforce healthcare rules and laws, depending on the nature of the issues involved.            

Scope of enforcement

What is the scope of their enforcement and regulatory responsibilities?

The National Council for Clinical Establishments regulates the minimum standards of facilities and services provided by clinical establishment under the Clinical Establishment Act 2010. The National Medical Commission regulates the medical education and practice in India under the National Medical Commission Act 2019. The Central Drugs Standard Control Organisation regulates the import, manufacture, distribution and sale of drugs and cosmetics under the Drugs and Cosmetics Act 1940. 

Regulation of pharmaceutical products and medical devices

Which agencies are principally responsible for the regulation of pharmaceutical products and medical devices?

The Ministry of Health and Family Welfare and the Central Drugs Standard Control Organisation, along with the State Food and Drug Administration, are the responsible agencies for the regulation of pharmaceutical products and medical devices, as well as the state licensing authorities. The agencies are funded by public funding (from the central government of India) and also by way of private fee collection of various forms through marketing approval, renewals, etc.

Scope of enforcement

What is the scope of their enforcement and regulatory responsibilities?

Under the Drug and Cosmetics Act, the regulation of the manufacture, sale and distribution of drugs is primarily the concern of the state authorities, while the central authorities (Central Drugs Standard Control Organisation) are responsible for the approval of new drugs, clinical trials, laying down the standards for drugs, control over the quality of imported drugs, coordination of the activities of State Drug Control Organisations and providing expert advice with a view to ensure uniformity in the enforcement of the Drugs and Cosmetics Act.

Specifically, the responsibilities/functions of the Central Drugs Standard Control Organisation are as follows:

  • Approval of new drugs and clinical trials;
  • Import registration and licensing;
  • Licence approval of blood banks, large volume parenteral containers, vaccines, recombinant DNA products and some medical devices;
  • Imposition of ban on drugs and cosmetics;
  • Grant of test licence, personal licence and no-objection certificates for export;
  • Testing of new drugs; and
  • Oversight and market surveillance.

The responsibilities of the state authorities include the following:

  • Licensing of drug manufacturing and sales establishments;
  • Licensing of drug testing laboratories;
  • Approval of drug formulations for manufacture;
  • Monitoring of quality of drugs and cosmetics, manufactured by respective state units and those marketed in the state;
  • Investigation and prosecution in respect of contravention of legal provisions;
  • Administrative actions;
  • Pre- and post- licensing inspection; and
  • Recall of sub-standard drugs.
Other agencies

Which other agencies (eg, competition or securities regulators, prosecutors) have jurisdiction over healthcare, pharmaceutical and medical device cases?

  • Ministry of Health and Family Welfare;
  • National Drug Regulatory and Development Authority;
  • National Drug Supply Logistic Corporation;
  • National Health Promotion and Protection Trust;
  • National Health Regulatory and Development Authority;
  • State Directorate of Public Health;
  • State Health Systems Management;
  • State Directorate of Hospital Services;
  • State Drug Supply Logistic Corporation;
  • State Health Promotion and Protection Trust;
  • State Health Regulatory and Development Authority;
  • State Health and Medical Facilities Accreditation Unit;
  • District Health Systems Manager; and
  • District Public Health Officer.
Simultaneous investigations

Can multiple government agencies simultaneously conduct an investigation of the same subject? Does a completed investigation bar another agency from investigating the same facts and circumstances?

The Ministry of Health Care and Family Welfare can use its Common Review Mission, Monitoring Reports, International Advisory Panel and Joint Review Mission to conduct investigations. In addition, the Central Drugs Standard Control Organisation and the state authorities are also responsible for investigations. Any investigation report can be challenged before the appellate authorities and may also be challenged before a court by way of a writ petition. Special courts may also be formed for trial of offences relating to adulterated drugs or spurious drugs, and the orders of such special courts are appealable before the concerned state’s high court.

Regulation of pharmaceutical products and medical devices

Monitoring powers

What powers do the authorities have to monitor compliance with the rules on drugs and devices?

Section 22 of the Drugs and Cosmetics Act 1940 gives powers to the inspector to inspect any premises where drugs are manufactured, sold, stocked and distributed, where the investigating officer has reasons to believe that an offence under the act has been committed. The authorities can impose a ban on drugs that are likely to involve any risk to human beings and animals or that do not have any therapeutic justification. The authorities can impose penalties to regulate and restrict the manufacture of any drug that does not comply with the healthcare provisions.

Investigation time frames

How long do investigations typically take from initiation to completion? How are investigations started?

There is no prescribed time duration for investigations and it mainly depends on the type of investigation. An investigation starts with the inspection of the premises wherein the drug is sold, manufactured, distributed, etc; the investigation officer takes samples of the drug from the said premises in the manner laid down in the Drugs and Cosmetics Act.

Access to investigation materials

What rights or access does the subject of an investigation have to the government investigation files and materials?

Under Section 23 of the Drugs and Cosmetics Act, the inspector is bound to intimate the person he or she takes drugs from for sampling about the purpose of the same. Furthermore, Section 25 of the act provides that the drug analysts shall deliver a copy of the report to the person who is required to disclose their names under section 18A to the inspector for further investigation. With this, the inspector is prohibited from disclosing any information acquired during their official duties, except for purposes of official business or when required by a court or without a sanction in writing by his/her official superior under Rule 53 of the Drugs and Cosmetics Act.

Investigations abroad

If pharmaceutical products or medical devices are made in a foreign country, may the authorities conduct investigations of the manufacturing processes in that other country?

No, the Drugs and Cosmetics Act does not give any such powers to the investigation authorities.

Enforcement proceedings

Through what proceedings do agencies enforce the rules?

The drug inspector, under the powers given to him/her under section 22 of the Drug and Cosmetics Act, conducts the preliminary investigation. Once the inspector has prepared his/her report, he/she further institutes a prosecution before the Sessions Court for the same. Such proceedings fall under the Code of Criminal Procedure 1973. A special court can also be established for trial of offences relating to adulterated drugs or spurious drugs. Enforcement activities, such as imposing a ban on drugs and cosmetics, can also be undertaken by the agency itself.

Sanctions

What sanctions and other measures can the authorities impose or seek in enforcement actions against drug and device manufacturers and their distributors?

Sections 26 to 32A of the Drugs and Cosmetics Act deal with all the measures that the central government, a court and the investigating authorities can impose or seek enforcement of. The central government can confiscate, regulate or restrict or prohibit the manufacture, sale or distribution of some drugs and impose a ban on certain drugs. The court can further impose penalties and sentence imprisonment for offences under the act.

Actions against employees

Can the authorities pursue actions against employees as well as the company itself?

Under Section 34 of the of the Drugs and Cosmetics Act, the authorities can take action against the company and all the persons responsible for the conduct of the company’s business who had knowledge of the act, wherein a company has committed any offence under the act. 

Defences and appeals

What defences and appeals are available to drug and device company defendants in an enforcement action?

The defences would depend upon the nature of the offence. Defences include:

  • having a valid and subsisting licence for the drug/device that is manufactured and the same is done in accordance with the provisions of the Drugs and Cosmetics Act and the Medical Devices Rules 2018; and
  • having made all disclosures as per the requirement of the law.

The sanctions/orders of special courts can be appealable before the High Court. The orders of the Central Drugs Standard Control Organisation and the state authorities can be challenged before a court.

Minimising exposure

What strategies should companies adopt to minimise their exposure to enforcement actions and reduce their liability once an enforcement action is under way?

A strategy that the companies can adopt to minimise their exposure in both cases is to have their drugs branded in accordance to the regulations of the Drugs and Cosmetics Act.

Companies can further reduce their liability by maintaining the records and furnishing information as and when required by any officer or authority for carrying out the functions under the act.

Companies must have independent teams to ensure regulatory as well as statutory compliance.

Recent enforcement activities

What have the authorities focused on in their recent drugs and devices enforcement activity and what sanctions have been imposed?

The authorities under the Drug and Cosmetics Act are focused on maintaining the standards of quality of drugs in the market. The authorities have imposed bans on certain drugs and seized adulterated drugs. The authorities have also imposed heavy fines and penalties for non-compliance with the provisions of the act.

Self-governing bodies

Are there self-governing bodies for the companies that sell pharmaceutical products and medical devices? How do those organisations police members’ conduct?

Self-governing bodies include:

  • the Indian Drug Manufacturers’ Association, whose quality management and technical and regulatory affairs committee regulates the conduct of its members;
  • the Bulk Drug Manufacturers Association of India;
  • the Federation of Pharma Entrepreneurs;
  • the Organisation of Pharmaceutical Producers of India;
  • the Confederation of Indian Pharmaceutical Industry; and
  • the Indian Pharmaceutical Association.

These self-governing organisations are advisory bodies and they function by sending representations, notices etc.    

Relationships between healthcare professionals and suppliers

Relationship rules

What are the rules prohibiting or controlling the financial relationships between healthcare professionals and suppliers of products and services?

The Uniform Code of Pharmaceuticals Marketing Practices 2014 governs relationships between healthcare professionals and suppliers of products and services; where the code is silent on any aspect, the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2002 prevails.

Under Section 7 of the code, companies or their associations or person acting on their behalf shall not extend travel facilities to healthcare practitioners. They are also barred from extending any hospitality such as hotel accommodation to healthcare practitioners or their families and from providing practitioners with any kind of cash or monetary grants. Funding for medical research can be extended only through approved institutions and should be fully disclosed.

Enforcement

How are the rules enforced?

All the Indian pharmaceutical manufacturers’ associations are mandated to establish an Ethics Committee for Pharmaceutical Marketing Practices (ECPMP) under Rule 9 of the Uniform Code of Pharmaceuticals Marketing Practices. They should also establish an Apex Ethics Committee for Pharmaceutical Marketing Practices to review the decisions of the ECPMP. Complaints of any breach of the code shall be tendered by the ECPMP.

Reporting requirements

What are the reporting requirements on such financial relationships? Is the reported information publicly available?

Under Rule 8 of the Uniform Code of Pharmaceuticals Marketing Practices, all Indian pharmaceutical associations must publish the code on their website. Further, all the associations are also mandated to upload the detailed procedure of lodging a complaint under the code on their website and details of all the complaints received and actions taken for the same. The complaints and decisions have to be sent to the National Pharmaceutical Pricing Authority on a quarterly basis. 

Regulation of healthcare delivery

Authority powers

What powers do the authorities have to monitor compliance with the rules on delivery of healthcare?

The authorities or officer authorised under the Clinical Establishment Act 2010 have rights to inspect or inquire any registered clinical establishment or work done by them; such inquiry can be a multi-member inspection team, in which case the clinical establishment is entitled to representation.

Furthermore, the authority shall communicate the results of any such inquiry/inspection to the clinical establishment and further advise the establishment to take required actions in accordance with the results of the inspection/inquiry. If the clinical establishment fails to take such actions in reasonable time to the satisfaction of the authority, the authority shall further issue directions and prescribe time duration in which such directions are to be complied with.

The authorities can also inspect manufacturing facilities and impose bans or penalties for non-compliance with rules and provisions.

Investigation time frames

How long do investigations of healthcare providers typically take from initiation to completion? How are investigations started?

There is no time prescribed for the completion of the investigations under the Clinical Establishment Act.

Access to investigation materials

What rights or access does the subject of an investigation have to the government investigation files and materials?

The authority under Section 33 of the Clinical Establishment Act shall communicate views of the authority with respect to the results of the inspection or inquiry and advise the establishment upon action to be taken. 

Enforcement agencies

Through what proceedings do agencies enforce the rules?

The authorities may have their own proceedings, such as in cases where the authorities impose a ban on drugs and cosmetics. Special courts may also be formed for trial of offences relating to adulterated drugs or spurious drugs. Such offences can also be heard by regular courts.

Under the Clinical Establishment Act, the authorities or the authorised officer conduct their own proceedings through inspections. The authorities can inspect any clinical establishment or their work. Such inspection can be a multi-member inspection whereby the inspector shall further produce a report in accordance with which the inspector shall advise the clinical establishment.

The Drugs and Cosmetics Act gives powers to the inspector to inspect any premises where drugs are manufactured, sold, stocked, distributed, etc, where the investigating officer has reasons to believe that an offence under the act has been committed in accordance with the procedure set under Section 23 of the act. The inspector prepares a report and can further institute proceedings before the sessions court.

Sanctions

What sanctions and other measures can the authorities impose or seek in enforcement actions against healthcare providers?

Sections 40 to 45 of the Clinical Establishment Act provide for penalties that can be imposed against a person in contravention of the provisions of the act. Fines up to Rs10,000 can be imposed for contravention of the provisions of the act under Section 40. A penalty not extending Rs200,000 can be imposed against a clinical establishment for non-registration of the clinical establishment under Section 41. A penalty of up to Rs500,000 can be imposed for disobedience of direction, obstruction and refusal of information, and a penalty of up to Rs10,000 can be imposed for minor deficiencies – both under Section 42. Section 44 establishes a penalty for contravention by companies and Section 45 for contravention by government departments.   

Under the Drugs and Cosmetics Act, the authorities can impose a ban on certain drugs. The authorities can regulate or restrict the manufacture of drugs in the public interest and can impose fines. Additionally, courts/special courts can also impose prison sentences.

Defences and appeals

What defences and appeals are available to healthcare providers in an enforcement action?

Any such defence would depend upon the facts and non-compliance with the provisions.

Any party aggrieved by a penalty imposed under Section 42 of the Clinical Establishment Act for disobedience of direction, obstruction and refusal of information can prefer an appeal to the State Council.

Similarly, penalties imposed by special courts under the Drugs and Cosmetics Act can be challenged before the high courts.

Minimising exposure

What strategies should healthcare providers adopt to minimise their exposure to enforcement actions and reduce their liability once an enforcement action is under way?

Healthcare providers must have their own internal policy and check and balance mechanism in place for compliance with the healthcare laws of the country. For example, healthcare providers should have their clinical establishment duly registered and that registration renewed under the provisions of the Clinical Establishment Act 2010. Further, healthcare providers should duly abide by the directions given by the adequate authority or officer after any inspection or inquiry of the clinical establishment under Section 33 of the Clinical Establishment Act to reduce their liability.  

Recent enforcement activities

What have the authorities focused on in their recent enforcement activity and what sanctions have been imposed on healthcare providers?

The authorities under the Clinical Establishment Act have focused on ascertaining that the clinical establishments are duly registered and renewed under the act and that inspections by the authorities are conducted under Section 33 of the act. Recently, the Supreme Court of India has also awarded Rs10 million in damages in a case of medical negligence – the largest damages awarded to date.

Further, the Supreme Court held the following in the judgement of Sameer Kumar v State of Uttar Pradesh, 2014 (8) ADJ 742:

…The medical professionals as well as competent authority of the clinical establishment shall maintain the standard of their clinical establishments with hygienic condition in accordance with the standard prescribed by the Medical Counsel of India or other medical councils or authority relating to Ayurved, Unani and Homeopath hospitals etc. (3) Medical record shall be supplied not only by allopathic clinical establishments but also by every medicinal branches like Ayurved, Homeopath, Unani etc., under names and designations whatsoever may be.

(4) The prescription memo of medical professionals or the admission form as the case may be, shall contain a caption, "You are entitled for copy of medical records at the time of discharge/end of treatment."

(5) No clinical establishment (supra) shall work unless they are registered with the State Government by an authority provided for the purpose or Chief Medical Officer of the district concerned as the case may be. The terms and conditions of registration shall be formulated by the Government which shall include supply of medical record to the patient or their attendants at the time of discharge from clinical establishments. In any case, for any compelling reasons, the medical records are not provided at the time of discharge, then it shall be provided within 72 hours as provided by the Regulation 1.3 of the Regulations (supra) framed by the Medical Council of India.

(6) The option be given for online registration and name of all clinical establishments and medical professionals of whatsoever branch may be, shall be placed on website so that peoples may have assess to it. The registration should be done at reasonable fees.

Let the registration of all clinical establishments (supra) be completed expeditiously say, within four months from the date of issuance of Government orders/circular.

(7) The State Government shall consider and place before the House of State Legislature to consider for adoption of the Clinical Establishments (Registration and Regulation) Act, 2010 (in short 2010 Act) in pursuance of power conferred by Article 252 of Constitution of India within four months.

(8) In case of any complaint followed by inquiry, it is found that medical record has not been provided at the time of discharge or on demand raised for the purpose within 72 hours, then after appropriate inquiry and show cause, the Government may de-register and seal such clinical establishments to pursue further with activities of medical care and treatment and may also impose penalty…

Self-governing bodies

Are there self-governing bodies for healthcare providers? How do those organisations police members’ conduct?

There are many self-governing bodies in the healthcare sector in India, including the following:

  • the Association of Healthcare Providers India has a body of patient responsibilities and rights which creates awareness of patient, family and healthcare organisations;
  • the Voluntary Health Association of India has an advisory committee to assist its members with the promotion of healthcare; there is also a federation of state voluntary health associations;
  • the Indian Pharmaceutical Association has a regulatory affairs division that participates in legislative activities that govern drugs, research, quality control, sales manufacturing and distribution of drugs, among other things;
  • the Indian Confederation for Healthcare Accreditation is associated with the World Alliance for Patient Safety and various other organisations for patient safety and awareness; the confederation divides its work into healthcare users and healthcare providers for better functioning;
  • the Indian Public Health Association advocates the policies, programmes and practices to improve public health, for which its members work;
  • the Health Information Management Association India, in collaboration with the International Federation of Health Information Management Associations, ensures that healthcare providers aim to reduce costs, provide better care and improve health; and
  • the Indian Medical Association has a self-governing code of conduct which also incorporates the Code of Medical Ethics that all its members must abide.
Remedies for poor performance

What remedies for poor performance does the government typically include in its contracts with healthcare providers?

The National Health Policy 2017 serves as a guiding principle; its national key goals include consistency, positive health outcomes, patient-centeredness, equity and trustable service delivery.

Private enforcement

Causes of action

What private causes of action may citizens or other private bodies bring to enforce a healthcare regulation or law?

Under the Consumer Protection Act 1986, a person can approach the Consumer Tribunal to denounce unfair practices (eg, unfair prices for medical services) or to help improve the enforcement of healthcare regulations. Further complaints can be lodged under the Drugs and Cosmetics Act 1940 and the Clinical Establishment Act 2010 for investigation in relation to proper working of a clinic, for instance. Citizens or private bodies may also approach a court by way of a writ petition or public interest litigation. 

Framework for claims

What is the framework for claims of clinical negligence against healthcare providers?

What is the framework?

In cases of medical negligence, a person has three avenues of recourse:

  • file a complaint with the State Medical Council;
  • file a criminal complaint; or
  • file a complaint with the National Consumer Disputes Redressal Commission.

What is the standard of care/ successful claim and breach?

“The standard of care which is expected of a medical professional is the treatment which is expected of one with a reasonable degree of skill and knowledge. A medical practitioner would be liable only where the conduct falls below the standards of a reasonably competent practitioner in the field”, Manglik v Chirayu Health and Medicare Private Ltd, CIVIL APPEAL NOS. 227-228 OF 2019 (@SLP (C) Nos 30119-30120 of 2016).

Are the courts reluctant to penalise public or quasi-public healthcare providers?

The courts are not reluctant to penalise public or quasi-public healthcare providers.

What are the damages available?

The Supreme Court has resorted to the principle of restitutio in integrum in awarding damages. Under this principle, an aggrieved person should get the sum of money that would put him/her in the same position as if he/she had not sustained the wrong (Krishnakumar v State of Tamil Nadu). Damages will largely depend upon the case at hand. However, in a recent case of medical negligence, the Supreme Court awarded damages of Rs11 million.

Seeking recourse

How and on what grounds may purchasers or users of pharmaceuticals or devices seek recourse for regulatory and legal infringements?

Whistleblowers may inform the authorities of any irregularities. Even purchasers or users may inform the authorities by way of representations of any non-compliance. Additionally, purchasers or users may file claims and complaints before a court if these users and purchasers are aggrieved parties. Complaints can also be filed before consumer forums.

Compensation

Are there any compensation schemes in place?

There are no specific provisions pertaining to compensation under any of the healthcare acts, but in cases of consumer protection and medical negligence the parties are provided with adequate remedy, including compensation where necessary.

Class and collective actions

Are class actions or other collective claims available in cases related to drugs, devices and provision of care?

Class actions can be filed under the Consumer Protection Act 2019; health as such is outside the purview of the law, but in cases of defective drugs or deficient devices the consumer can seek remedy under the act.

Review

Are acts, omissions or decisions of public and private institutions active in the healthcare sphere subject to judicial or administrative review following a complaint from interested parties?

In which fora are complaints heard?

Under Section 33 of the Clinical Establishment Act 2010, the authority or officer has powers to inspect any registered clinical establishments or the work conducted or done by them.

Complaints made under the Drugs and Cosmetics Act 1940 are dealt by the inspector; the inspector further institutes a prosecution before the Session Court once his or her report is ready. Such proceedings fall under the Code of Criminal Procedure 1973.

Who has standing?

The inspector under Section 33 of the Clinical Establishment Act and the inspector under Section 23 of the Drugs and Cosmetics Act 1940 have standing.

On what grounds can complaints succeed? What remedies can the adjudicator order?

Under Section 13 of the Drugs and Cosmetics Act, anyone who imports drugs that are adulterated or that are prohibited under the act shall be punishable under the act with a fine or imprisonment.

Section 27 of the act provides for penalties for the manufacture, sale and distribution of any drug that is deemed to be adulterated under Section 17 of the act. Furthermore, Section 31 provides for the confiscation of drugs that are in contravention of the act. The central government has been given powers to regulate or restrict the manufacture, sale and distribution of drugs in the public interest under Sections 26A and B of the act.

Whistleblowers

Are there any legal protections for whistleblowers?

Yes. The Whistleblowers Protection Act 2011 provides legal protection to whistleblowers. (However, the act does not apply to the private sector.) A Reward Scheme for Whistleblowers has been formulated by the Central Drugs Standard Control Organisation (CDSCO) to ensure the protection of the identity of the whistleblower. The identity of the whistleblower is known only to the concerned zonal and sub-zonal officers of the CDSCO, the Drug Controller General of India and the Director General Health Services.

Does the country have a reward mechanism for whistleblowers?

Yes, under the Reward Scheme for Whistleblowers run by the CDSCO that is applicable in respect of drugs, cosmetics and medical devices, a reward of up to 20% (not exceeding Rs25 million) of the total cost of the consignments seized will be payable to the whistleblower. A quarter will be given at the time of filing of the charge sheet, another quarter will be given at the time of disposal of the case in favour of the government in a court of first instance and the remaining 50% will be paid when the case has been finally disposed of in favour of the government and no appeal can be instituted. The eligibility of a whistleblower and the quantum of rewards to be received shall be decided by a committee chaired by the Director General Health Services.

Are mechanisms allowing whistleblowers to report infringements required?

The Drug Controller General of India and other relevant officials will be the nodal authority who will oversee the functioning of the Reward Scheme. Whistleblowers may approach zonal and sub-zonal officers of the CDSCO to inform them of the manufacture or even the movement of spurious/adulterated drugs. Upon receiving such information, the relevant officers will immediately proceed with an investigation in coordination with the State Drugs Control Administration.

Cross-border enforcement and extraterritoriality

Cooperation with foreign counterparts

Do prosecutors and law enforcement authorities in your country cooperate with their foreign counterparts in healthcare cases?

Yes.

Triggering investigations

In what circumstances will enforcement activities by foreign authorities trigger an investigation in your country?

This will mainly depend upon the facts of each case. Foreign authorities may inform their Indian counterpart of such cases and, depending on the facts and compliance with the local laws, appropriate action can be taken.

Pursuing foreign entities for infringement

In what circumstances will foreign companies and foreign nationals be pursued for infringements of your country’s healthcare laws?

Indian healthcare laws can be enforced against Indian entities. However, foreign companies/nationals can be impleaded as a party particularly in litigation subject to establishing common design or concerted action or a combination of actions to secure the doing of the infringing acts, then each of the combiners had made the act his/her own. Additionally, such foreign companies/nationals can also be blacklisted and the local authorities can impose a ban on such import from foreign companies.

 

Update and trends

Current developments

What are the authorities’ enforcement priorities likely to be in the coming year? Are there any noteworthy cases pending? Are there any current developments or emerging policy or enforcement trends that should be noted?

The Indian healthcare system has been developing very effectively in the past few years. Many new legislations and policies have come into force, such as the Medical Devices Rules 2018, the Consumer Protection Act 2019 and the National Medical Council Act 2019, as well as the National Health Policy 2017, and AYUSH and Ayushman Bharat – National Heath Protection Mission.

The primary goal of the National Health Policy is “the attainment of the highest possible level of health and wellbeing for all at all ages, through a preventive and promotive health care orientation in all developmental policies, and universal access to good quality health care services without anyone having to face financial hardship as a consequence. This would be achieved through increasing access, improving quality and lowering the cost of healthcare delivery”.