Refurbished medical equipment: A bane to healthcare – Rajiv Nath, Jt MD, Hindustan Syringes & Medical Devices

Association of Indian Medical Device Industry (AiMeD) has been urging the government to restrict the import of all types of refurbished medical devices, not just radiology devices, as it believes it is a challenge to ensure their upkeep as per original factory specifications, which in turn may compromise patient safety.

The medical sector has been using refurbished medical devices due to its cost effectiveness and the budget constraints at many levels in the Indian healthcare industry. Many original manufacturers and standalone refurbishes have established a separate second-hand market which has been flourishing in India. But, there are issues which have been raised by domestic manufacturers and demands total ban on such devices. But so far, refurbished medical devices have zero bans in the sector. At the same time, import of such machines chews major chunk of machine imports, year-over-year. Rajiv Nath, Joint Managing Director at Hindustan Syringes & Medical Devices Ltd and Forum Coordinator of Association of Indian Medical Device Industry (AiMeD), in conversation with SME Futures, talks about the various aspects of refurbished medical equipment and why Indian manufacturers seek total ban on such devices.

What is refurbished medical equipment? What is the basic understanding of people about refurbished medical equipment?

There are two major types of pre-owned medical equipment imported into India:

  1.     Refurbished
  2.     Non-refurbished/pre-owned/ demo etc.

The refurbished ones are supposed to be properly restored devices to the original safety and effectiveness by the Original Equipment Manufacturer (OEM) as well as the certified refurbishing companies. But, to verify that it has been restored to the original safety and effectiveness by OEM is difficult as there is no transparency. Mostly, these devices are a part of the obsolete generation.

The non-refurbished ones are pre-owned, bought and sold over the net, which have a huge list of operators. There is no proper record that exists anywhere on the incidences related to pre-owned equipment, because no OEM has any obligation to do post-market surveillance under the Food and Drug Administration (FDA) or CE marking, as they do for a new equipment.

The World Health Organisation (WHO) feels it is important for developing countries to ensure that companies supplying refurbished equipment fulfill after-sale obligations including the continued availability of technical support and maintenance services.

What is the present scenario of refurbished equipment market in India? 

Unfortunately, medical devices in India are still dominated by the multinational overseas players and are hugely import dependent at nearly 90 per cent. The Medical Electronics and Equipment India’s import crossed ₹ 15,000 Crore last year and over 50 per cent of this is guesstimated to be of pre-owned equipment.

With nobody watching, it is difficult to tell how widespread the use of pre-owned equipment is. Only 20 per cent of India’s labs are in the organised sector and many of them use second-hand units. Nobody knows what the other 80 per cent use.

As per the latest norms of the Atomic Energy Regulatory Board (AERB), hospital authorities have to obtain Procurement forms and submit Quality Assurance reports of Radiological Equipment’s for Radiation Safety. The Indian manufacturers are following it strictly. However, in case of refurbished radiological equipment this needs to be checked. If not, then, these refurbished machines should be banned, otherwise, the unchecked radiation will be harmful for patients, attendant’s, as well as, for the operators.

It has been seen, that no hospital or user charges a patient a subsidized rate, just because they use a refurbished/used/pre-owned system. So, this refurbished route is to get cheap pre-owned machine into the medical service industry and make huge profits at the cost of safety concerns.

How are the refurbished machines affecting medical market at large?

As mentioned earlier, refurbished machines are supposedly properly restored devices to the original safety and effectiveness by OEM as well as the certified refurbishing companies. But, to verify that it has been restored to the original safety and effectiveness and adequately calibrated is difficult.  Availability of spare parts after five-seven years of life is doubtful in any electronic item. But these devices can take a toll on the medical market economy on two main accounts, which are;

(1)  Loss of job creation owing to the harm caused to local manufacturing, and

(2)  Loss of revenue, owing to reduction of import duty revenue by “reduced cost” while increasing the healthcare burden owing to inadequate/ineffective treatments.

Our association, supports restriction or outright ban on any type of pre-owned/refurbished/used medical devices in India. In my opinion, even if the import duty on medical devices has been reduced to 7.5 per cent or even zero, the government has failed to verify if the patients have truly benefited from this move. Indian manufacturers are forced by retailers and hospitals to maintain the same MRPs as importers so that they don’t lose out on their margins. This leads to unethical marketing.

Are Indian manufacturers against refurbished medical equipment? What are the issues or challenges that worries Indian medical equipment manufacturers related to refurbished medical equipment?  

Yes, Indian manufacturers are against the import of refurbished medical equipment. We support total ban on any type of refurbished/used/second-hand medical devices for use in India. These devices can create serious health issues for patients. In addition, any leniency towards these devices can create a serious setback for the ‘Make in India’ program in the medical device sector which is only beginning to pick-up with the recent investment in Andhra Med Tech Zone (AMTZ).

Refurbished products are unsafe for patients from the point of view of calibration and reduction. There is no transparency around the re-calibration of these products, there are no support services and, most importantly, the price benefits from pre-owned products are not passed on to the patient.

The situation could lead to doubtful ‘branded’ refurbished products circulating in the market, brought in by traders and not the manufacturers. With the industry this divided, the onus now shifts back to the Government to navigate a middle ground and provide a safe pathway that would be in the interest of patients.

India lacks stringent laws and regulations when it comes to importing equipment. Many domestic manufacturers have complained about the need to have regulations and monitoring of the equipment that are dumped in India. The manufacturers claim that it is easy for the Chinese companies to export substandard equipment to India due to lack of a regulatory framework.

We seek a ban on refurbished medical equipment for the next five years, till such time, we have a strong regulatory regime to ensure validated and calibrated equipment limited access, for enabling patient safety.

What does the Association of Indian Medical Device Manufacturers demand in tandem to banning refurbished machines?

AiMeD has strongly been opposing the idea of permitting import of any kind of pre-owned and refurbished medical equipment, on the grounds of serious health safety issue for Indian people.

Having said so, such equipment of doubtful efficacy and quality are leading to incomplete and wrong diagnosis, causing either inadequate or wrong treatment or even undesired medication, whereby, the deserving patient loose one last chance for proper recovery owing to time constraints or financial constraints and in some cases, even get exposed to unsafe radiation. In addition to this, it has a disruptive and adverse impact on domestic manufacturing of medical devices which now has beginning to gain pace.

Ban on refurbished medical equipment will help realise our vision for India to be among the top five medical devices manufacturing hubs worldwide, as the Council will spearhead the policy needs to accelerate the manufacturing of medical devices in India and end the 70-90 per cent import dependence forced upon us and an import bill of over ₹ 31, 000 crore of which over ₹ 15,000 Crore is for medical electronics. Currently, the Indian market at retail and institutional level is estimated to be at over ₹ 70000 Cr (USD 10 billion).

There is an urgent need for an integrated and calibrated development policy to put the ‘Make in India’ initiative in medical devices sector in top gear, and reduce high import dependency on foreign-made devices in order to promote indigenous manufacturing of drugs and devices which would go a long way in making healthcare affordable.

What is the Government’s stand on the issue of using refurbished machines?

Healthcare has always been a serious matter to be taken care of, especially in India. The Indian government appointed a panel to restrict import of refurbished radiology devices. In 2015, Ministry of Environment and Forests (MoEF) issued a circular seeking restriction of import of pre-owned medical equipment over three years old. But still, this has not been enforced by the customs department. The Indian government has issued orders to appoint an inter-ministerial committee to restrict the import of refurbished radiology devices and to examine whether to stop such imports, the approval requirements that are in place for such products, concerns around patient safety and the barriers faced by the domestic market.

AiMeD has been urging the government to restrict the import of all types of refurbished medical devices, not just radiology devices, as it believes it is a challenge to ensure their upkeep as per original factory specifications, which in turn may compromise patient safety. Nowadays, it is difficult to get genuine spare parts even for consumer printers and computers that are over five years old, so ensuring the up- keep of second-hand electronic medical equipment poses an even bigger challenge.

Also, keeping track of incidents involving pre-owned devices is a big worry as OEMs have no post-market reporting obligation for pre-owned devices as they do for new equipment.

The government should ban import of second-hand medical equipment and electronics, even if refurbished for the next five years, till we have a strong regulatory framework to ensure patient safety by way of protection from radiation or inaccurate results by validation, calibration and testing.

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