India Law News 1

India Law News A quarterly newsletter of the India Committee

VOLUME 3, ISSUE 2, SPRING/EARLY SUMMER 2012

overnment healthcare programs are bankrupting Federal and State governments in the United States. To add to the pressure,

employer-provided health insurance takes an ever-greater share of corporate income. The Federal government’s response has been to require individual health insurance coverage and start creating a set of government bureaucracies that are intended to control costs.

Part of the reason for this is a complex relationship between subsidized healthcare; subsequent high public demand for the subsidized care; a consequent shortage of healthcare resources and therefore, ever-higher prices for relatively scarce healthcare. An increasingly popular way to escape from the system is to leave the United States and receive healthcare outside the U.S., a phenomenon often known as “medical tourism.”

Medical tourism is of course an old phenomenon. Wealthy patients for centuries have gone to areas well-known for cures, such as spas and hot springs, including the famous town of Spa in Germany, or Bath in England. And with the advent of air travel, wealthy

patients for decades have traveled transcontinentally for medical care. Patients in countries with government health systems have long traveled internationally for better care or to avoid the lengthy wait-times to receive government healthcare. The new medical tourism phenomenon in the U.S. is that patients are bypassing good care nearby to get good but more economical care overseas. Until recently, the phenomenon in the United States has focused on Latin America, as well as East and South Asia, primarily due to much lower cost structures and an increasingly sophisticated healthcare infrastructure. India in particular, along with Thailand, has been at the forefront of providing a high level of care for complex surgeries, such as cardiac surgery, with lengthy rehabilitation schedules. From the perspective of developing U.S. markets, both of these destinations have a high level of medical expertise, but suffer from unfamiliarity to patients and a lengthy travel time, as we shall see.

Medical tourism has heretofore essentially been

limited to patients paying out of their own pockets.

continued on page 5

MEDICAL TOURISM AND INDIA By Eric Hargan

he lead article of this edition of India Law News, notes that the wealthy have traveled far from home in search of medical cures for centuries: from the Roman hot springs at Bath, England at the dawn of the First Century, C.E. to the alpine

spas of Europe in the 19th Century. The persistence of the practice was mocked in the classic movie Casablanca when Rick famously quipped that he came to the desert-surrounded city of Casablanca "for the waters." What is different today is that it is the middle class that travels the world in search of affordable and high quality medical care. India offers both.

Despite the growth of what has come to be known as medical tourism in India, little has been written on the legal aspects of this growing industry. How are the standards of care maintained at the levels of the best international standards? How reliable and expeditious is justice for malpractice in a court system renowned for its glacial pace? Could a foreign litigant recover damages comparable to those in her home country? How is personal electronically generated and stored health information protected when it has to be transmitted across borders? Moreover, increased spending and investment in the public and private health services sectors in India, the growth of private health insurance, along with medical tourism are expected to spur exponential growth in the market for medical devices. These developments merited a further discussion of the law regarding the regulatory framework for the importation and use of medical equipment in India.

This edition of India Law News opens with an overview of medical tourism/medical

travel by Eric Hargan of Greenberg Traurig. Eric outlines the growth of the medical travel industry but quickly hones in on potential areas of concern. These include the distance disadvantage of India for U.S. travelers when compared to Central American venues, the need for hospitals to have Joint Commission International (an independent hospital regulatory body) approval, the preference of American patients to be treated by U.S. trained physicians, and the perception of uncertain remedies for medical malpractice. Suhas Srinivasiah and Arjun Krishnamoorthy of Kochhar & Co. pick up this point with their article on the law of medical malpractice. They outline the key elements of India’s Consumer Protection Act and its evolution, with an analysis of recent cases that give teeth to the CPA. Sajai Singh of J. Sagar Associates and Kenneth Rashbaum of Rashbaum Associates, LLC address protection of electronically transmitted and stored personal health information in the context of HIPAA, HITECH and India’s Information Technology Act and regulations. We conclude our discussion of medical tourism with an article by Poorvi Chothani of LawQuest, on India’s immigration regulations for medical travelers.

Neeraj Dubey of PSA Legal Counselors then takes us into the world of medical

devices with an article on the approval process for medical devices. One of the interesting features of the law in this area is India’s acceptance of U.S. FDA and E.U. standards for medical devices. We end the special focus section of the issue with an article by Shuchi Sinha and Debashish Sankhari of AZB Partners, on the regulatory framework for medical devices. Of particular interest is their discussion on the stalled effort to take medical device regulation out of the ambit of the Central Drugs Standard

ABOUT THIS ISSUE

CONTENTS

OVERVIEW

2 About This Issue 4 Co-Chairs’ Column

________ ________ COMMITTEE NEWS

31 Submission Requests 32 India Committee

________ ________ SPECIAL FOCUS

1 Medical Tourism and India 8 Medical Malpractice in India 12 Health Data Safeguards 16 Medical Visas 18 Medical Device Approval

Process 21 Medical Device Regulatory

Regime

________ ________ FEATURED ARTICLES

25 Engaging Contract Labor in

India

________ ________ CASE NOTES

29 Recent Indian Cases

3

Control Organization (“CDSCO”) which covers both pharmaceuticals and medical devices and is enforced by the Ministry of Health and Family Welfare, and put it under the ambit of a proposed Medical Devices Regulation Act which would cover medical devices exclusively and would be enforced by the Department of Science & Technology.

In this issue, we have also included an article by Sunil Tyagi & Namrata Wadhawan

of ZEUS Associates providing an overview of contract labor laws in India, an increasingly important topic as domestic and foreign businesses address their staffing needs by engaging contract labor. The issue closes with case notes by Aseem Chawla and Surabhi Singh of Amarchand & Mangaldas & Suresh A. Shroff & Co.

We hope that you enjoy this edition of the India Law News!

Sincerely, Bhali Rikhye

Guest Editor, Spring Issue Bhalinder Rikhye is appellate partner in the health law firm of Peltz & Walker in New York

City, representing physicians and hospitals in professional liability and licensing matters. Bhali can be contacted at brikhye@gmail.com.

The Editorial Board of India Law News expresses its sincere appreciation to Bhali

for his significant efforts and contributions on this issue. Editorial Boar

India Law News 4 Spring/Early Summer 2012

elcome to the India Committee! The editorial board of India Law News keeps publishing one

outstanding issue after another. This issue, focusing on medical tourism and medical devices, is no exception. We trust you will find the articles in this issue timely and informative. Special thanks to Bhali Rikhye for serving as guest editor.

The India Committee held a business meeting at the Section’s

Spring conference in New York in April, with many old friends and new friends in attendance. Among other subjects, we had an engaging discussion about the how to spread the word about the Committee’s many initiatives. The India Committee has much to offer, and we continue to reach out to lawyers who have an interest in Indian legal, regulatory and policy matters, both in the private and public spheres. If you know of someone who may have an interest, let them know about our programming, publications, and opportunities to network with others who share an interest in the Indian legal fraternity.

If you transact business with Indian Companies, you are no doubt

aware of the Supreme Court of India's decision in January in the Vodafone tax case. The Indian Parliament is currently considering a legislative response to the Vodafone decision in the current Union Budget. As a result, taxation of investments into India is evolving rapidly. To address these issues, the India Committee (along with the Section's Tax Committee as co-sponsor) presented a webinar on June 5, Vodafone and Beyond: Changes to India's Tax Regime for Structuring a Transaction. The program included expert commentary and insight from those who were actually involved in the Vodafone case and are closely monitoring the status of any legislative override. The India Committee continues to monitor important issues of interest to our membership and will be holding its next webinar on “Medical Device Exports and Joint Ventures in India” in October 2012.

The India Committee is only as strong as its membership. As

always, we are grateful for your continued support of the Committee's efforts.

Vandana Shroff Priti Suri Sanjay Tailor

India Law News EDITORIAL BOARD (2011-2012) Editor-in-Chief Kavita Mohan Grunfeld Desiderio Lebowitz Silverman & Klestadt, Washington D.C. Co-Editors Poorvi Chothani LawQuest, Mumbai, India Sean G. Kulkarni Washington D.C. Antonia Giuliana Kelley Drye, New York, NY Aseem Chawla Amarchand & Mangaldas, New Delhi, India Desktop Publishing LawQuest, Mumbai, India India Law News is published quarterly by the India Committee of the American Bar Association’s Section of International Law, 740 15th Street, N.W., Washington, DC 20005. No part of this publication may be reproduced, stored in a retrieval system (except a copy may be stored for your limited personal use), or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise) without the prior written permission of the publisher. To request permission, contact the Co-Chairs of the India Committee.

India Law News endeavors to provide information concerning current, important developments pertaining to law in India, Committee news, and other information of professional interest to its readers. Articles reflect the views of the individuals who prepared them and do not necessarily represent the position of the American Bar Association, the Section of International Law, the India Committee, or the editors of India Law News. Unless stated otherwise, views and opinions are those of the authors and not of the organizations with which they are affiliated. This newsletter is intended to provide only general information and should not be relied upon in the absence of advice from competent local counsel. SUBMISSION DEADLINES

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CO-CHAIRS’ COLUMN

India Law News 5 Spring/Early Summer 2012

continued from page 1

Part of the reason is programmatic: the Federal Medicare program will not pay for healthcare services outside the U.S. except in certain very limited circumstances. The private market is very different: theoretically, there are few limits on large private employers and insurers providing for or encouraging medical tourism, but this has not been the norm. Partly, the hesitancy to embrace medical tourism is driven by patients: patients seek care close to their homes, so they prefer care in the U.S. And there is no economic reason to go abroad for less costly primary care; therefore, routine and primary care is usually local. Specialist care, for which travel is undertaken, is usually care from a physician or medical center with cutting-edge expertise. This care would also usually be sought in the U.S. However, there are certain complicated procedures, such as heart bypasses, hip and knee replacements, or other major surgeries, which have established protocols (not needing one-of-a-kind specialists) and which are expensive in both hospital and post-acute recovery expenses. There are also procedures, or drugs or devices that have not been approved in the U.S. by regulators, and so are only available overseas. These types of healthcare services have been the services most likely to be successfully offered through medical tourism.

These needs for less expensive care or care not otherwise available, have met with an initial response: large employers are increasingly considering offering medical tourism to their employees as a healthcare option. It is being considered in some cases as a serious potential solution to increasing healthcare costs. However, much care must be taken in the presentation of medical tourism options. Rather than requiring overseas care (which could generate costly negative blowback from employees), it is possible employers will offer medical tourism as an option, whereby

employees could be told that they could (i) get an operation locally with a significant co-pay or (ii) travel overseas to receive the operation with no, or much smaller, co-pay. Smaller co-pays (with a difference of a few hundred or even a thousand dollars) may not incentivize patients to go overseas for care. However, with respect to an operation costing, say, $200,000, employers are looking at requiring significant patient co-pay for domestic care (which could be up to tens of thousands of dollars) versus providing free overseas care. A serious incentive such as this may lead to an embrace by employees of the overseas option.

Of course, one major issue for U.S. patients will be quality of care (or perception of quality). Rightly or wrongly, U.S. patients will be concerned about quality of overseas care vis a vis the U.S. system. In this light, getting Joint Commission International (“JCI”) accreditation can be of great benefit. JCI is an affiliate of the Joint Commission, a widely respected U.S.-based accreditation organization which provides surveys and accreditation to healthcare providers in the U.S. It is not simply a matter of patient comfort, because few patients will understand the full import of gaining such accreditation. The greater impact will be on hospitals, doctors and other U.S. healthcare actors who may refer or be consulted by patients for their opinion, and who will more likely understand what Joint Commission accreditation means. Accreditation (and preparing for it) also has a salutary impact on an organization’s performance, and helps concretize the standards that are expected, and will assist with successful implementation of a medical tourism program.

Another issue is providing U.S.-licensed doctors. There are examples of U.S.-licensed doctors practicing overseas, but not a great number, because the financial rewards of practicing in the U.S. are significant. There are many successful operations without U.S.-licensed

MEDICAL TOURISM AND INDIA

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doctors as the care directors, but the lack of U.S.-licensed doctors may continue to be a significant issue with the expansion of medical tourism among U.S. patients, who tend to trust U.S. doctors. The resistance of U.S. doctors to practicing overseas is also sometimes a question of distance: this is a potential advantage that the Caribbean and Latin American sites have over Indian and other Asian sites, due to their geographical proximity to the U.S. India does offer significant advantages over many competing sites, but operators who want to “move to the next level” have to take on this issue of providing U.S.-licensed (or U.S.-trained) doctors to American patients.

One major legal issue that is too little addressed is legal liability. The U.S. is an infamously litigious society, and many persons and organizations get involved with facilitating medical tourism without understanding what legal risks it entails. For example, some U.S. persons have acted as healthcare “travel agents” for patients and have subsequently been sued in U.S. court when the procedure outside the U.S. went wrong. Facilitators in the U.S. must have a written understanding with U.S. patients. This agreement should cover a number of issues, but must provide a patient acknowledgement that the facilitator is not responsible in any way for the success or non-success of the medical services, and is not liable for any outcome, including injury or death. The facilitator’s role must be spelled out clearly and limited.

The same should be true of the non-U.S. providers. They should be clear in providing information on what is being offered and guaranteed (or not). A standard packet of forms regarding health evaluations, practices, outcomes and medical records should be prepared ahead of time with counsel. The relationship with the U.S. medical tourism facilitator should also be clearly spelled out.

The legal climate in U.S. healthcare is changing in unexpected ways due to the passage of the 2010 health bill. The Patient Protection and Affordable Care Act (“PPACA”), also known as “Obama Care,” would seem to have no direct impact on medical tourism. However, the indirect impact of PPACA could be profound. PPACA seeks to control costs through a

super-bureaucracy which will directly control U.S. healthcare costs through (presumably) cutting coverage of certain products and services and lowering provider reimbursement, or a combination of both. If this new bureaucracy succeeds where all others have failed, U.S. healthcare costs will go down and the need for medical tourism will fade. Even if the super-bureaucracy fails, and the incentives for medical tourism remain in place, greater governmental control over employer health insurance might easily lead to U.S. healthcare providers lobbying the government to require a “Buy American” mandate into health insurance or create more subtle disincentives, such as: disallowing travel expenses; creating minimum and maximum provider charges; or disallowing per diem post-acute care recovery payments, for example. As the government gets more involved in directing healthcare, it will naturally, as it already does in Medicare, favor domestic providers over overseas providers in ways large and small. Of course, this is all speculative; no such regulations have been announced or put in force, but it is worth considering this issue and remaining aware of it.

India is an interesting case for medical tourism. With a large English-speaking healthcare workforce, it is a natural choice for U.S.-directed medical tourism. However, as noted, long air flights from the U.S. and a relative shortage of U.S.-certified doctors have created issues for many potential patients. And of course, an increasingly wealthy India means that the cost differential between India and the U.S. is more or less constantly being whittled away.

India has been sought out particularly for high-cost surgeries, such as heart bypasses, which have lengthy rehabilitation periods. The trend has grown as Indian healthcare has continued to receive good press and word-of-mouth recommendations from returning patients. In addition, the rising prestige of Indian hospitals, physicians and medical staff and the greater profile of Indian medical products and pharmaceutical companies no doubt also has had a role in increasing the comfort level of U.S. patients with receiving care in India.

Although increasing wealth in India and an increasing domestic demand for sophisticated medical

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care will no doubt raise the cost of healthcare in India over time, such is the pace of U.S. medical inflation, that India will not soon catch the U.S. in healthcare costs. And in an increasingly globalized market, even services that seem naturally local, such as healthcare, will be provided in the global marketplace. By paying attention to the fundamental issues of quality, quality perceptions, accreditation, legal structure and the evolving legal landscape in the U.S., Indian healthcare providers have a bright future in succeeding in this new marketplace.

Eric Hargan is a Shareholder in Greenberg Traurig’s healthcare department, based in Chicago, Illinois. He formerly served in the position of Deputy Secretary of the U.S. Department of Health and Human Services in Washington, D.C. and as a U.S. representative to the World Health Organization. He may be reached at hargane@gtlaw.com; phone (312) 208-7089.

India Law News 8 Spring/Early Summer 2012

ndia is widely known as a key and preferred, low-cost destination for medical tourism among other Asian developing and African countries.

In recent years, it has also emerged as a key destination even for citizens of Western countries. As an example, in December 2011, Jack Jones, a Jehovah’s Witness whose faith barred him from having blood transfusions, made headlines for being the first U.S. citizen to undergo a bloodless surgery in India.

This article provides a summary of the various

medical malpractice laws in India with a focus on the Consumer Protection Act, 1986 (the “CPA”). Specifically, the article touches upon the various fora set up under the CPA, the tests applied by Indian courts when dealing with medical malpractice cases, and the relevant factors taken into consideration while awarding compensation, among other issues. CONSUMER PROTECTION ACT

Briefly stated, a “consumer” who hires or avails of

any “services” for consideration is entitled under the CPA to sue for any “deficiency in service” (not being services rendered free of cost or of a personal nature) and claim compensation. “Deficiency” is usually construed to mean any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance of any service.

Until 1996, legal proceedings against doctors for

malpractice were relatively few. However, the decision of the Supreme Court of India in Indian Medical Association v. V. P. Shantha (AIR 1996 SC 550) brought doctors and hospitals under the purview of the CPA. After this judgment, doctors and hospitals were

allowed to be sued under the CPA for any “deficiency in service.”

Filing actions under the CPA

The aggrieved person would have recourse to the

specially created consumer disputes redressal fora established under the CPA to establish any malpractice of a doctor or hospital and claim compensation.

Depending on the value of the services and/or the

compensation claimed, the aggrieved person would have to approach (i) the District Consumer Dispute Redressal Forum (pecuniary limit of up to INR 2,000,000 or approx. USD 40,000); (ii) the Consumer Disputes Redressal Commission of each Indian State or province (the “State Commission”) (which enjoys pecuniary limit above INR 2,000,000 but up to INR 10,000,000 i.e., between approx. USD 40,000 to 200,000); (iii) or the National Consumer Disputes Redressal Commission, New Delhi (the “National Commission”) (pecuniary limit of any amount above INR 10,000,000 or approx. USD 200,000).

In terms of hierarchy, the State Commission is

empowered to hear appeals against orders of the District Forum and the National Commission hears appeals from the State Commission. Appeals from the National Commission reside with India’s apex court, the Supreme Court.

PRINCIPLES OF NEGLIGENCE

To determine deficiency in service of the doctor or

hospital, the same tests applied to determine the tort law principle of “negligence” are applicable under the CPA. Accordingly, as per the Supreme Court’s decision

MEDICAL MALPRACTICE LAWS IN INDIA – A SUMMARY By Suhas Srinivasiah and Arjun Krishnamoorthy

9

in Jacob Mathew v. State of Punjab [(2005) 6 SCC 422)] the aggrieved person has to prove that there existed (i) a duty of care (between patient and the doctor), (ii) there was breach of such duty and (iii) but for the said breach, no injury would have been suffered.

Duty of care and standard of care

In the case of Laxman Balkrishna Joshi v. Trimbak Bapu Godbole (AIR 1969 SC 128), the Supreme Court held that a doctor owes a patient certain duties such as a duty of care in deciding what treatment to give and a duty of care in the administration of that treatment, among others. Accordingly, under Indian laws, a doctor is duty-bound to treat a patient with a reasonable degree of skill, care and knowledge.

On the issue of the standard of care to be adopted, it appears that to date, Indian courts have applied only the Bolam Test as laid down by English courts in Bolam v. Friern Hospital Management Committee [1957] 1 WLR 582]. Therefore, at present, neither a doctor nor any hospital may be held liable for medical malpractice if the doctor or institution acted in accordance with a practice accepted by a responsible body of medical practitioners skilled in that particular art.

Breach of duty and causation

Having established the duty and standard of care,

the aggrieved patient next has to prove that there was a breach of the applicable duty and that the doctor had fallen below the accepted standard of care. The breach of the duty should then be linked to ‘causation’, i.e. a link should be established between the act of negligence and the injury suffered by the patient.

Indian courts have applied the ‘but for’ test in order

to establish causation. In Geetu Sapra v. B. L. Kapoor Memorial Hospital [(2006) 3 CPJ 1], the ‘but-for’ test was applied to establish that if not for the defective equipment in the hospital, the patient would have not suffered the injury. In Samira Kohli v. Prabha Manchanda [(2008) 2 SCC 1] which deals with “informed consent,” the Supreme Court held that a doctor can be held

negligent if proper consent is not taken and the failure to take consent is sufficient to determine causation. LIABILITY OF HOSPITALS

Corporate hospitals in India seem to be preferred

for foreign medical tourists rather than Government run hospitals and District Health Centers (village hospitals). Such corporate hospitals have been held liable by applying the tort law principle of ”vicarious liability” for any malpractice or ”deficiency in service” on the part of the doctors or nurses employed in such hospitals. Indian courts have ruled that a hospital cannot escape liability merely by arguing that it only provides infrastructural facilities and services of nursing and support staff to the consultant doctor and that the hospital cannot perform or recommend an operation on its own [Rekha Gupta v. Bombay Hospital Trust and Another (2003) 2 CPJ 160)].

In addition to holding hospitals liable for acts and

omissions of doctors and nursing staffs, Indian courts have also held the hospital liable if it employs unqualified doctors or nurses [Professor P. N. Thakur v. Hans Charitable Hospital (2007) 3 CPJ 340)]. Further, hospitals have been held liable for ‘deficiency in service’ under the CPA for providing defective equipment [see Geetu Sapra case supra].

COMPENSATION UNDER THE CPA

If it is determined that a doctor or hospital had

been negligent, the aggrieved person is entitled to claim damages or compensation under the CPA. While determining the amount of compensation to be awarded under the CPA, Indian courts normally take into consideration the following key factors:

(a) Pain and suffering endured by the patient

(including the duration and intensity) as a result of the negligence of the doctor;

(b) Loss of earnings or future earnings; and

(c) Expenses incurred for the medical treatment.

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One of the highest compensation finally awarded in a medical malpractice case is INR 10,000,000 (approx. USD 200,000). This was awarded by the Supreme Court in the case of Nizam Institute of Medical Sciences v. Prashanth S. Dhananka [(2009) 6 SCC 1].

Recently, the National Commission in Kunal Saha v.

Sukumar Mukherjee and Others [Original Petition No. 240 of 1999 decided on October 21, 2011], awarded a compensation of INR 13,465,750 (approx. USD 270,000) to the plaintiff, out of which the hospital was directed to pay a sum of INR 4,040,000 (approx. USD 80,800) and the remaining amount by the defendant doctors. The National Commission apportioned liability based on the degree of negligence of each doctor and the hospital. In this case, the hospital was found to be one of the main negligent parties.

The Kunal Saha case supra is an instance of a ‘non-

resident Indian’ (“NRI”) (in this case, a resident of the U.S.) suing in an Indian court seeking compensation for medical malpractice by doctors in India. It is understood from press reports that Kunal Saha would be appealing the aforesaid decision of the National Commission before the Supreme Court seeking enhanced compensation.

It is pertinent to note that traditionally, Indian

courts have not awarded punitive or exemplary damages and have been fairly conservative in awarding compensation in medical malpractice cases under the CPA.

Theoretically, an aggrieved person can file [an

action either under the CPA or under tort laws alleging negligence]. However, since bringing the medical profession under the CPA in 1996, Indian courts have frowned upon civil suits filed in regular courts under tort laws alleging negligence by doctors and have encouraged actions to be filed under the CPA.

EXECUTION PROCEEDINGS AND REMITTING COMPENSATION ABROAD

Under Indian law, upon award of final compensation (i.e., all appeal remedies have been

exhausted), if the defendant has not voluntarily rendered compensation, the aggrieved party is entitled to commence proceedings to execute the award. In such proceedings, the court is empowered to seize and sell (by public auction) any property belonging to the defendant to ensure that the aggrieved person is paid due compensation. Courts are also empowered to imprison the defendant for any non-payment of the award.

In cases involving foreigners, since the proceedings

are in India, a concern relates to actual remittance and receipt of the awarded compensation amount by the foreigners abroad. In this regard, it is pertinent to note that India’s foreign exchange laws have been substantially liberalised over the years and it should now be possible for bankers to rely on court orders to allow the defendants to remit the compensation amount to the aggrieved person abroad.

In case this is not possible, a prior approval of the

Reserve Bank of India (RBI) may be required for the remittance abroad. Usually, obtaining such prior approval to permit the remittance by providing a certified court order should not be unduly problematic.

CRIMINAL NEGLIGENCE OF DOCTORS

In India, in addition to an action under the CPA, a

doctor can also be liable under penal laws for criminal negligence if such doctor is shown to have been rash and negligent, resulting in the death of the patient [Section 304A of the Indian Penal Code]. A person convicted under Section 304A may be subject either to simple or rigorous imprisonment for a term of up to two years, or with fine, or with both.

The Supreme Court has in the cases of Suresh Gupta

v. Government of NCT of Delhi [(2004) 6 SCC 422] and the Jacob Mathew case supra clarified the position regarding criminal negligence of doctors and held that an “extremely reckless act or omission by the doctor” would have to occur for the doctor to be held criminally negligent. In other words, the degree of

11

negligence should be of a very high degree for a doctor to be held criminally negligent.

Insofar as criminal liability of hospitals is

concerned, the present view appears to be that a hospital cannot be held criminally liable for negligence even though the doctor can be held responsible. In Indraprastha Medical Corp Ltd. V. State NCT of Delhi [(2011) 1 Crimes 124], the Delhi High Court observed that the offence of medical criminal negligence cannot be fastened on a hospital since the hospital can neither treat nor operate a patient on its own. Further, the Supreme Court, while quashing criminal cases against doctors, seems to have also held that the hospital cannot be held criminally liable [Malay Kumar Ganguly v. Sukumar Mukherjee [(AIR 2010 SC 1162)].

CONCLUSION

Since the various specialised fora established under

the CPA are in the general nature of quasi-judicial bodies, aggrieved persons can personally argue their cases without the involvement of lawyers. Further, the court filing fees for an action in a consumer forum is rather minimal (may not exceed USD 150). This means that costs of pursuing an action under the CPA can be fairly minimal.

Normal court procedure rules typically also do not

apply to CPA proceedings. Considering that the usual time period to adjudicate cases in regular Indian courts can extend to 3 – 5 years, actions under the CPA are known to conclude within a year.

Hence, the CPA has been a fairly successful law in

dealing with cases relating to ‘deficiency in service’ including medical malpractice cases. The only concern is that Indian courts have been reluctant to award punitive or exemplary damages. The approach that Indian courts may adopt on the concept of loss of future earnings especially while dealing with cases involving foreigners (where the earnings may be much more compared to Indians in similar work profiles) is also an area of concern.

Suhas Srinivasiah is a Partner and Arjun Krishnamoorthy is an Associate at the Bangalore office of Kochhar & Co., a leading law firm in India. They can be reached at suhas.srinivasiah@bgl.kochhar.com and arjun.krishnamoorthy@bgl.kochhar.com.

India Law News 12 Spring/Early Summer 2012

ndia has long been a highly popular destination for visitors from around the globe, and growth in the travel & tourism sector has been steadily increasing. But with all due

respect to the heritage attractions of the country, the increase is attributable, in large part, to the increasing attraction of medical tourism. India has built hospitals with cutting edge medical technology, and boasts of physicians educated in the finest medical schools in the world. Medical procedures and hospital admissions cost a fraction of that in the U.S. Information about a patient can be sent in milliseconds from the patient’s home caregiver to the facilities in India, and back again when the procedure has been completed. Doctors on opposite sides of the globe can consult over the Internet or email in real time, sometimes even during surgery.

But what happens to that information in transit and in the offices of the physicians and hospitals?

Medical records are increasingly created, transmitted and stored in electronic formats. Recent media reports of personal data breaches, many from distinguished medical centers such as Stanford and University of California Los Angeles (“UCLA”), can serve to reduce trust in electronic medical record systems and, by extension, the caregivers themselves. This was not such a looming concern in the word of paper records but in the digital age, where information can be stolen, accessed or lost in milliseconds, and where identity theft is a constant shadow, the development of medical tourism may well be linked to the means by which patients’ health information – the most sensitive of personal data – is appropriately safeguarded through laws, and information management practices of India and the U.S.

Given these concerns about the security of their health information, a threshold question may arise as to why people would rush to India, a country in which

information protection is still in an evolutionary state, for treatment. One simple reason is that medical treatment package prices in India are 35% to 40% less than the total treatment cost in U.S. or U.K. According to the Indian industry association, Associated Chambers of Commerce and Industry (“ASSOCHAM”), medical tourism industry is a growing sector in India. The medical tourism industry in India, which is currently poised at around Rs. 4,500 crore is likely to be worth Rs. 10,800 crore by 2015. The cost of certain surgical procedures is one-tenth of what it is in the U.S. and Western Europe and sometimes even lesser. According to a survey report conducted by Wockhardt Hospitals, the number of “outsourced patients” has nearly doubled in the last few years. No wonder: one of the patients of Wockhardt has said that his surgery cost him $11,000, a bargain-basement price that was a quarter of what hospitals in North Carolina were quoting. With the debate raging over health care reform, growing numbers of Americans aren't waiting for Washington: they are, in effect, outsourcing their own medical care to India.

Yet, there are very few studies on the management of patient medical information, between India and the U.S. The absence of an internationally agreed definition of medical tourism, and of a common methodology for data collection, is one of the main reasons for the paucity of such data. It is possible, though, to compare the schemes for protection of the confidentiality and security of medical information in the U.S. and India, and in so doing ascertain potential effects of the distinctions in medical confidentiality on the future growth of Indian medical tourism.

Privacy of Medical Information in the United States

A physician or medical center that sends patient information to caregivers in India must do so in a

INNOCENTS ABROAD? HEALTH DATA SAFEGUARDS FOR MEDICAL TOURISTS IN INDIA By Kenneth N. Rashbaum and Sajai Singh

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manner that complies with applicable law, and must safeguard any such information received from India with regard to their patients. Privacy law in the U.S. healthcare system is defined by the basic law for healthcare confidentiality, the Health Information Portability and Accountability Act of 1996 (“HIPAA”). HIPAA is most widely known for its regulations governing medical confidentiality, the HIPAA Privacy Rule and the HIPAA Security Rule. The former comprises of more than 800 pages of standards and requirements that, distilled to their essence, require the caregiver to implement practices to assure that patient-identifiable health information is not disclosed to anyone without authorization of the patient, except for uses of that information that concern treatment, payment or operations of the particular caregiver, and other derogations. In this way, HIPAA greatly resembles the privacy scheme of the European Union in Privacy Directives EC 94/46. The HIPAA Security Rule, which is far shorter, was promulgated to enable privacy in the age of digital medical records. Its standards require physical, technical and administrative (policy and procedure) safeguards for uses, disclosures and storage of electronic medical information. Examples of such safeguards include encryption of patient-identifiable information in storage and transit; access controls, including passwords or biometrics; and due diligence in the selection of business associates who may access that information or to whom it is disclosed. The Privacy and Security Rules are enforced by the Office For Civil Rights of the U.S. Department of Health and Human Services (“DHHS”), which has the authority, after appropriate administrative proceedings, to levy fines of up to $1,000,000 USD per violation. It recently has imposed a number of monetary sanctions, and has begun a program of “spot” (surprise) audits of medical facilities.

HIPAA was supplemented and strengthened in 2009 by the HITECH Act (Health Information Technology for Economic and Clinical Health), which became effective in February 2010. HITECH sets forth requirements for responses to data breaches, including notification to affected patients. If the breach comprises more than five hundred patients, the entity is required

to also notify the media and the Secretary of DHHS. HITECH also gave states attorneys general jurisdictions to bring proceedings for HIPAA violations if DHHS declines to do so. The HITECH Act extends the reach of HIPAA to “Business Associates,” such as law firms, consulting firms and outsourced medical records and billing entities in the U.S. and, significantly, it also provides a basis for liability to healthcare providers if they fail to exercise due diligence in selecting Business Associates who then breach patient confidentiality through data breaches.

HIPAA is a minimum standard for the security and privacy of medical information. U.S. states may impose stricter requirements that HIPAA and many have done so (these include California, Massachusetts, North Carolina and New York, among others).

Medical Information Privacy in India

Protections for medical information in India may be found in the Constitution and two legislative Acts. The key to whether this network of provisions can provide sufficient protection to assure U.S. patients of confidentiality, however, depends upon the rigor of enforcement.

India has a strong network of provisions that cover medical information privacy. Article 21 of Constitution of India, 1950 states that “No person shall be deprived of his life or personal liberty except according to procedure established by law.” The Right to Privacy has been read into this Section, as an integral part of the fundamental right to live life with dignity. Courts in India have held that the Right of Privacy may, apart from contract, also arise out of a particular specific relationship that may be commercial, matrimonial, or even political. A doctor-patient relationship is considered fiduciary in nature, but is also professionally a matter of confidence. Therefore, doctors are morally and ethically bound to maintain confidentiality. In such a situation, public disclosure of even true private facts may amount to an invasion of the Right of Privacy, which may sometimes lead to the clash of one person's right to be let alone" with another person's right to be informed.

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The Right to Privacy is an essential component of right to life envisaged by Article 21. The right however, is not absolute. It may be lawfully restricted for the prevention of crime, disorder or protection of health or morals or protection of rights and freedom of others, as in the case of Mr. X v. Hospital Z [(1998) 8 SCC 296], wherein the apex court of India held that the hospital owes a ‘duty of care’ to disclose the HIV positive condition of the patient to the person he was likely to be married to. Such disclosure was held to be a ‘reasonable restriction’ on the right to privacy of the patient.

Apart from the essential fundamental right to privacy granted to citizens under the Constitution of India, specific protections have been granted to information relating to medical history, records, biometric information, physical and mental condition etc. under two important enactments, namely, the Indian Medical Council Act, 1956 and the Information Technology Act, 2000 and the rules formulated thereunder, as detailed hereafter.

The Indian Medical Council Act, 1956

Regulations 2.2 and 7.14 framed under the Indian Medical Council Act hold that information about a patient’s ailment cannot be disclosed without patient consent.

Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (“Privacy Rules”)

These Rules have been formulated under the Information Technology Act, 2000, and are the first of its kind in relation to data protection and privacy in India.

Rule 3 provides an inclusive definition of “Sensitive Personal Data or Information.” It states that sensitive personal data or information includes, amongst other things, “(c) Physical, physiological and mental health condition, (d) Sexual orientation, (e) Medical records and History, (f) Biometric information, (g) any details relating to above clauses as provided to body corporate for providing service and (h) any of the information received under above clauses by body corporate for

processing, stored or processed under lawful contract or otherwise.”

Rule 6 sets forth that disclosure of sensitive personal data or information by a body corporate to any third party shall require prior permission from the provider of such information, who has provided such information under lawful contract or otherwise, unless such disclosure has been agreed to in the contract between the body corporate and provider of information, or where the disclosure is necessary for compliance of a legal obligation.

Rule 8 requires “Reasonable Security Practices and Procedures” to be maintained by bodies corporate. A body corporate or a person on its behalf shall be considered to have complied with reasonable security practices and procedures, if they have implemented such security practices and standards and have a comprehensive documented information security programme and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business. In the event of an information security breach, the body corporate or a person on its behalf shall be required to demonstrate as and when called upon to do so by the agency mandated under the law, that they have implemented security control measures as per their documented information security programme and information security policies. The Rule provides that the International Standard IS/ISO/IEC 27001 on Information Security is one such standard that may be followed by bodies corporate. If a body corporate chooses its own standards of self-regulation, it is required to get its codes of best practices duly approved and notified by the Central Government for effective implementation.

Information Technology Act, 2000 (“IT Act”)

Section 43 A of the IT Act permits “Compensation for failure to protect data.” Where a body corporate is negligent in implementing and maintaining reasonable security practices and procedures regarding sensitive personal data and thereby causes wrongful loss or wrongful gain to any person, it shall be liable to pay

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damages by way of compensation to the person so effected. However, this must be read with the Privacy Rules, which provide that a body corporate or person on its behalf, who has implemented ‘reasonable security standards and procedures’ as prescribed under Rule 8 above, shall be deemed to have complied with the expected duty of care under the IT Act.

Section 66 E of the IT Act prescribes punishment for violation of privacy”. It states that whoever intentionally or knowingly captures, publishes or transmits the image of a private area of any person without his or her consent, under circumstances violating the privacy of that person shall be punished with imprisonment, which may extend to three years or with fine not exceeding Rs. 2,00,000, or with both.

Section 72 of the Information Technology Act, 2000 lays down the penalty for breach of confidentiality and privacy, as imprisonment for a term which may extend to two years, or fine which may extend to Rs. 1,00,000, or with both.

Section 72 A of the Information Technology Act, 2000 lays down the punishment for disclosure of information in breach of lawful contract, and provides for penalties for intentional unauthorized access to personal information of another.

Although there may have been numerous civil and criminal proceedings initiated against the violators of the IT Act, enforcement of these provisions may still be characterized as “work in progress.” The legislature has created various statutory bodies/courts to try matters related to the IT Act, but it is underutilized. Breaches under the Privacy Rules have not been reported, consequently giving rise to a lack of jurisprudential data on the efficacy of enforcement. Accordingly, patients may take little comfort from the presence of a robust legislative mechanism to enforce

the IT Act and Privacy Rules until there is evidence of specific proceedings to enforce the Privacy Rules.

India has various statutes, rules and regulations that govern and regulate the protection of personal data, information, and privacy of individuals, and. the Constitution of India has been read to include a ‘right to privacy’ as a part of the fundamental right to life of individuals,, But it is the enforcement of these laws that will eventually determine whether medical tourism “consumers” will retain sufficient confidence in the privacy of their medical information transmitted between India and the U.S. to fuel the growth of the medical tourism industry.

Kenneth N. Rashbaum, Esq., is Principal of Rashbaum Associates, LLC, in New York (www.rashbaumassociates.com). He focuses his practice on information governance and data protection compliance for multinational corporations and healthcare providers. A counselor, litigator and trial lawyer with over twenty-five years experience in representation of life sciences entities, Ken is an active member of the American Bar Association Section of International Law, and writes and speaks extensively on international data protection and data privacy issues. He can be contacted at krashbaum@rashbaumassociates.com.

Sajai Singh is a Partner with J. Sagar Associates (JSA), a full service corporate law firm in India. As a head of the Technology Practice of JSA, he focuses on emerging technologies, business process outsourcing and biotechnology. He also undertakes transactional work with a focus on representing emerging technology companies in areas of inbound investments in India, venture capital investments, joint ventures, strategic alliances, mergers and acquisitions. He can be contacted at sajai@jsalaw.com.

India Law News 16 Spring/Early Summer 2012

oreign nationals who wish to avail of medical treatment in India should obtain a Medical Visa (“MV”). Such a visa is granted to those seeking

medical treatment in reputed or recognized specialized hospitals or treatment centers in India. According to information available on the official website of the government of India, MVs can be granted for different types of treatment including for neurosurgery, ophthalmic disorders, heart-related problems, renal disorders, organ transplantation, congenital disorders, gene-therapy, radio-therapy, plastic surgery or joint replacement surgery. Indian consular posts also consider MV applications for treatments under India's traditional medical practices like Ayurveda.

Each application for a MV must clearly establish that the applicant has been advised specific medical treatment by a practitioner in his or her country of nationality or residence. It is advisable to add information regarding the potential treatment in India, a description of the credentials of the institute where the medical treatment will be administered along with a letter from this institute describing the treatment. If possible, the applicant should also add a letter from the medical practitioner in India who will administer the medical treatment confirming that the applicant is scheduled for the relevant treatment.

A MV is granted for a period of one year or for the duration of the treatment whichever is less. It is possible to obtain an extension if the treatment takes longer that a year or the anticipated duration. Additional extensions may be granted by the Ministry of Home Affairs in certain circumstances.

Up to two attendants who are close relatives of the patient are allowed to accompany the patient. Each of

the accompanying individuals must obtain a separate Medical Attendant visa (“MXV”), which will be issued with the same validity as the MV. Both MV and MXV visas grant multiple entries of up to three visits. The processing times vary at different consular post. However, U.S. born American citizens are usually granted a visa within two to three working days. REGISTRATION IN INDIA

All foreign nationals on an MV or an MXV need to register with the Foreigners Regional Registration Office (“FRRO”) or the Foreigners Registration Office (“FRO”) within 14 days of arrival in India. The office where a foreign national should register depends on the place of residence of the individual. There are seven FRROs in all - one each in Hyderabad, Mumbai, New Delhi, Chennai, Bangalore, Kolkata and Amritsar. The relevant FRO is the office of the District Superintendent of Police in the relevant jurisdiction. Pakistan Nationals are required to register within 24 hours and Afghanistan Nationals are required to register within 14 days of their arrival in India (days should be counted from the date of arrival). There is no fee to be paid at the time of registration but if there is a delay in registering a penalty of US$ 30 will be levied.

In addition to the standard documents required for registration, individuals on an MV need to provide as evidence of the proposed treatment, a copy of a medical certificate or prescription issued by a recognized, reputed or specialized hospital in India. Individuals on MXV need to establish their relationship with the patient and also provide evidence of the treatment as set out above.

MEDICAL VISAS FOR INDIA By Poorvi Chothani, Esq.

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CONVERSION OF VISAS

Foreign nationals on a business visa or an employment visa in India can apply to convert their visas to a MV if they fall ill, are unable to travel and require specialized medical treatment in India. A change of visa may be required if the individual falls out of status, for example if he is on an employment visa and the visa expires. Such individuals will be granted an MV provided they fulfill all the criteria to be eligible for an MV and can provide a medical certificate from a government or government-recognized hospital. In such cases qualifying members of the principle applicant could apply for an MX, which is usually granted to co-terminate with the principle applicant's MV. The MV and MXV will bear an endorsement stating that employment or business is not permitted.

The Medical Visa is a result of the Government's recognition of the importance of medical tourism in India. It enables individuals to enter the country to procure medical treatment on valid visas.

Poorvi Chothani, Esq. is the founder and managing partner of LawQuest, a law firm in Mumbai, India, and a Vice Chair of the India Committee. She is admitted to the New York State Bar and is a registered solicitor in England and Wales. Poorvi has been practicing law in India since 1984 and is admitted to the Bar Council of Maharashtra and Goa. She can be reached at info@lawquestinternational.com.

India Law News 18 Spring / Early Summer 2012

he development of medical devices has extended the ability of physicians to diagnose and treat diseases, and has made great contributions to

health by improving the quality of life of patients. Generally, medical devices would include any instrument, apparatus, machine, appliance, implant, in vitro reagent or calibrator, software, material or other similar or related article. However, in India, the medical devices employed in internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals are considered to be “drugs” as notified by the central government in its official gazette after consultation with the Drugs Technical Advisory Board. Those medical devices not notified as drugs only require an import or manufacturing license and no quality check system exist for them. REGULATORY FRAMEWORK

At the moment, in India there is no single comprehensive specific law regulating medical devices. The import, manufacturing, sale and distribution of medical devices are regulated under the Drugs and Cosmetics Act, 1940 (“India Act”), the Drugs and Cosmetics Rules, 1945 (“Rules”); and the Central Drugs Standard Control Organization (“CDSCO”), under the Ministry of Health and Family Welfare (“Ministry”) is the principal regulator. A draft Bill on “Regulation of Medical Devices” (“the Bill”) has been pending since 2006. Once implemented, it will, perhaps, streamline the medical devices sector. Until such time, one has to refer to multifarious regulations.

With effect from March 1, 2006, the Ministry approved a set of procedures for the import as well as manufacture of medical devices in India. The Drugs Technical Advisory Board, which provides technical

guidance to CDSCO, proposed certain changes in the Rules, which among others provides a categorization of medical devices into four classes. This classification is based on the risk level, intended use and on adverse effect of the devices on the human body based on the potential risks associated with the technical design and manufacture of these devices. The classes of devices are: (i) Class A: Low risk devices and equipment such as thermometers and tongue depressors; (ii) Class B: Low to moderate risk devices including hypodermic needles and suction equipment; (iii) Class C: Moderate to high risk equipment like lung ventilators and bone fixation plates; and (iv) Class D: High risk devices such as heart valves and implantable defibrillators. The regulatory control becomes stringent with each progressive class and the conformity assessments are proportionate to device classification. IMPORT OF MEDICAL DEVICES

Presently, the import of medical devices is largely unregulated and medical devices can be freely imported into India. The purchaser (whether it is a government hospital, a private hospital or a doctor) evaluates the quality of the product being purchased. Normally, the U.S. Food and Drug Authority (“FDA”) and the European Conformite Europeenne (“CE”) approved products are preferred because of their better quality and performance. It is necessary to follow the procedures for registering and obtaining a license as laid down under the Rules. Import licenses are conditional and granted for a period of three years. Breach of any of the stipulated conditions may lead to the cancellation of the license.

To be registered in India, the imported device must be approved for sale in the manufacturer’s country of origin. If the device has already received approval from an agency abroad, such as, the U.S. FDA, evidence of

CONUNDRUM OF MEDICAL DEVICES APPROVAL PROCESS IN INDIA By Neeraj Dubey

India Law News 19 Spring/Early Summer 2012

such approval must be provided along with a copy of quality standard ISO/EN certification which assesses the quality and risk of the devices manufacturing facility. Medical devices with prior approval from any of the recognized regulatory authorities, like FDA and CE are subjected to an abridged evaluation in India.

If a device is not approved for marketing in the

country of origin, the importer has to submit additional evidence such as reports of clinical trials, details of sales, certificates of satisfactory use from medical specialists about the use of the device and details of product complaints, if any. If a device incorporates a medicinal product, which is likely to act upon the body in conjunction with the device, it is pertinent to provide relevant data on the safety, quality, and usefulness of the medicinal substance used along with data on compatibility with medicinal products, clinical data and published articles, if any.

The manufacturer must also have complied with

product standards and home country quality control requirements. The manufacturer of the devices, the importer or his agent must file an application to obtain a registration certificate with respect to the premises where the devices are manufactured and with regard to the devices. The product information and the undertakings with respect to product standards, safety and effectiveness requirements and quality systems in the country of origin are necessary to be furnished. Crucially, a brief description of the device, its intended use and method of use, medical specialty in which the device is used, the qualitative and quantitative particulars of the constituents, device master file with details of the manufacturing process/flow chart and the component/material used and risk assessment as per ISO 14971 are necessary to be provided. Once a medical device reaches the market in India, the manufacturer has to adhere to requirements of post-marketing surveillance (“PMS”) norms to systematically monitor the performance of the device. PMS involves procedures for maintenance of records, complaint handling, adverse incident reporting and procedures for product recall.

MANUFACTURE OF MEDICAL DEVICES

The manufacture of medical devices in India

requires a license from the government. An application

for the license is made with a brief description of the manufacturing process, details of the manufacturing standards and “best practices” that will be followed by the company, as well as product evaluation, standards, and procedures for testing the device. The Rules prescribed in Schedule M-III list mandatory "good manufacturing practices" that manufacturing companies must follow. The law provides that any manufacturing can be done under the direction and supervision of only a whole-time employee of the manufacturer and who is qualified to do so. India has several stringent industrial and labor laws that make the occupier of the manufacturing plant responsible for any breach in compliance. The occupier is generally the managing director of the company that runs the manufacturing unit or a director on the board of directors and can be fined up to INR 0.2 million or imprisoned up to two years for any non compliance.

As proposed under the Bill, the regulatory authority sets up an expert committee to consider proposals and evaluate medical devices that do not have any benchmark certification. The committee after completing its assessment forwards its opinion regarding suitability of the device to the competent licensing authority which can grant permission for the device to be launched in the market. The licensing authority after joint inspection and verification forwards the license to Central License Approving Authority (“CLAA “) for approval. The license is finally issued in form 28 of the Rules after due approval of CLAA. The stockist and retail sellers of medical devices are also required to obtain sales licenses from the respective state licensing authorities for medical devices.

CLINICAL INVESTIGATIONS

At present, clinical trial studies are not regulated in

India. However, a set of good clinical practices guidelines laid down by the CDSCO govern clinical trials and specify the responsibilities, inter alia, of sponsors, investigators, and ethics committees. In 2010, CDSCO released a guidance document on the requirements for conducting clinical trials of medical devices in India (“Guidance”). It is necessary to file an application with the CDSCO before conducting the study and the application should indicate the precise intent of the application (e.g. whether the application is

India Law News 20 Spring/Early Summer 2012

for a feasibility study or a safety and efficacy study, or a post market study). The entity sponsoring the study must also submit a declaration on its letterhead prescribing the extent of delegation of responsibilities to an individual who is appointed as the Principle Investigator. It is also necessary to provide the global regulatory status of the device (particularly when 5 Global Harmonization Task Force (“GHTF “) countries i.e. U.S.A., Australia, Japan, Canada and European Union are involved) along with detailed technical data.

Though the document is still non-binding, it

provides sufficient procedural information regarding the method to all stakeholders.

MEDICAL DEVICES: QUALITY STANDARDS

According to the Guidance, all medical devices sold

in this country should carry the ICAC mark (Indian Conformity Assessment Certificate) to indicate their conformity with the provisions of the schedule of the Guidance to enable them to move freely within the country. CLAA adopts and recognizes quality standard BIS 15575 or its revisions and quality standard ISO 13485 in respect of the specifications to be followed for quality for the manufacturer to demonstrate conformity with the relevant regulatory requirements. Any reference to the harmonized standards includes the monographs of the Indian pharmacopoeia and U.S., EU pharmacopoeia wherever applicable, notably on surgical sutures and on combination of pharmaceutical and devices.

It is necessary that the labels on the packaging

material for medical devices comply with the relevant ISO standards. It is also necessary to denote

internationally accepted symbols regarding sterilization, single use etc, as per ISO 15223-1:2007. When medical devices are sold in bulk the packaging material of individual devices do not have to bear the date of manufacture, which must appear on the bulk packaging material.

In light of the growing usage of medical devices,

stringent regulatory standards are essential to ensure that the devices are tested, safe and with minimum adverse reactions. Standards regarding safety, risk elements, effectiveness, efficiency and performance of the medical devices need to be well established. It will be interesting to see how the regulatory scenario changes if and when the Bill is enacted into law. Apart from the Bill, there are different proposals for regulating India's medical devices sector by different regulatory bodies, like amending the India Act and Rules proposed by the Ministry. The inter-governmental dispute is a cause for concern and confusion for India's medical devices industry.

Neeraj Dubey is a principal senior associate and commercial lawyer with PSA Legal Counselors. He heads the Food & Pharma and IPR practice areas of his firm. He may be contacted at n.dubey@psalegal.com.

India Law News 21 Spring/Early Summer 2012

eflecting the Indian economy’s globally feted growth in recent years, its healthcare industry

and market for medical devices have witnessed a significant upswing. Some estimates suggest that the Indian healthcare industry may grow to around USD 238.76 billion by 2020. The Indian medical technology industry (covering devices as well as software, re-agents etc. but excluding medicines) has been estimated to reach around USD 5 billion in 2012 with an annual growth of up to 15% (as reported by Confederation of Indian Industry and Deloitte in 2010 in “Medical Technology in India – Riding the growth curve”).

The Indian healthcare system has made significant strides since India’s independence in 1947, particularly in addressing life expectancy, infant mortality rate and containment/eradication of previously virulent diseases. India is globally the third largest producer (by volume) of pharmaceutical drugs (as noted on the official website of the Indian Government’s Department of Pharmaceuticals) and already attracts sizeable numbers of “medical tourists” from Europe and North America due to the availability of world class doctors and facilities at relatively low cost. However, paradoxically, access to quality healthcare in India remains very limited for the general public, particularly outside its large cities and for the economically disadvantaged. In this context, the Indian government’s healthcare policies and the regulatory framework governing the manufacture and sale of medical devices assumes importance. This article discusses certain key elements of the current legal and regulatory framework as well as proposed legislative and policy initiatives.

EXISTING REGIME

The regulation of medical devices in India emerged rather slowly over the last few decades. The primary law dealing with medical devices is the Drugs and Cosmetics Act, 1940 and the accompanying Drugs and Cosmetics Rules, 1945 (collectively, “Drugs Act”).

While the Drugs Act is principally a statute dealing with pharmaceutical/medicinal formulations, in 1983, the definition of ‘drug’ under the Drugs Act was expanded to include devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings. The specific devices covered by the Drugs Act are notified by the Indian Government. The Drugs Act covers a product’s supply chain from manufacturing to testing, distribution and sale, including, inter alia, registration of the manufacturing premises (in India or elsewhere), import license, sale and distribution license, clinical trial requirements, compliance with labeling and manufacturing standards and requirements.

The (very limited) initial list of regulated devices has been expanded over the years to include about thirty items including (i) In–vitro diagnostic devices for HIV, (ii) Cardiac Stents and Orthopedic Stents, (iii) Catheters, (iv) Intra Ocular Lenses, (v) Bone Cement, (vi) Heart Valves and (vii) Internal Prosthetic Replacements.

Evidently, the list still remains quite small, leaving out a multitude of medical devices, including commonly marketed items like gluco-meters used in homes as well as hospitals for checking blood sugar levels, and high-value medical devices like pace-makers. Such devices are not specifically within the scope of the Drugs Act and appear to fall into a grey

MEDICAL DEVICES: INDIAN REGULATORY REGIME AND WAY FORWARD By Debashish Sankhari and Shuchi Sinha

India Law News 22 Spring/Early Summer 2012

area (as opposed to the detailed regulations for such devices in certain jurisdictions).

A review of the Drugs Act also reveals that drugs

and pharmaceuticals are regulated by provisions aimed at addressing public health and safety concerns. These include provisions that deal with the adulteration of drugs and spurious drugs, but would not cover devices. As a result, important public health and safety aspects of medical devices remain largely unaddressed. So, while the Drugs and Cosmetics Rules, 1945 contain a few schedules dedicated to medical devices (including Schedule M-III relating to requirements of factory premises for medical devices and Schedule R-1 relating to quality specifications of specified devices), they are inadequate in dealing with the wide variety of medical devices being marketed in a fast growing sector.

Another feature of India’s regulation of

drugs/medical devices is that it is divided between authorities under (A) the central government of India (“GOI”) and (B) the various State governments (India currently comprises 28 States, apart from 7 Union Territories). This arises from the federal system in India, as reflected in India’s Constitution (which contains 3 lists demarcating matters to be legislated and implemented by GOI and the State governments). “Drugs” features on the “Concurrent List”, i.e., matters on which both the GOI and State governments have competence. Interestingly, since “Public health and sanitation; hospitals and dispensaries” is listed under the “State List”, healthcare is primarily a matter under the State governments.

Broadly, the regulatory machinery consists of the

Central Drugs Standard Control Organization (“CDSCO”), under the Drugs Controller General of India (“DCGI”), Ministry of Health and Family Welfare, GOI. This is the central regulatory agency, which works in conjunction with the State Drug Control Organizations to administer the provisions of the Drugs Act. The Drugs and Technical Advisory Board (“DTAB”) is another nodal agency, set up under the provisions of the Drugs Act to advise the GOI and State governments regarding technical matters relating to the Drugs Act. Further, the Ministry of Health and Family Welfare has established numerous Medical Device Advisory Committees (“MDACs”) dealing with

various categories of medical devices (e.g., reproductive & urology devices, ophthalmic devices, etc.). Their primary objective is to advise and assist the DCGI in reviewing applications for new medical devices covered under the Drugs Act, and clinical trials regarding the same. Additionally, the MDACs also have the power to identify devices that need to be regulated / notified by the GOI and prepare guidelines for research and development of new medical devices relevant to India.

There is a further division of responsibilities within this regulatory machinery. The regulation of manufacture, sale and distribution of drugs and regulated devices is primarily the concern of the State authorities while the central agencies (primarily CDSCO and DGCI) are responsible for approval of new drugs, clinical trials, laying down the standards, control over the quality of imported drugs and regulated devices, coordination of the activities of State authorities, etc.

The co-existence of multiple regulatory agencies

makes the tracking and understanding of regulatory landscape and developments a cumbersome and daunting task. Added to this, the notification based approach has made the development of regulation very ad-hoc. Often industry players need to reach out to the regulator(s) to seek clarifications. Such a situation gives rise to uncertainty for manufacturers and distributors of most types of medical devices and also compromises protection of public safety and health. This certainly does not bode well for the medical devices market (that is poised to grow exponentially) and customers/users. Unwittingly, this splitting of powers between the GOI and State governments has also created some challenges in the effective regulation of medical devices since any centralized dedicated regulation of medical devices can easily upset this delicate balancing of responsibilities.

That there is a great need for comprehensive

regulation of medical devices in India is not in question. As has been noted by Association of Indian Medical Device Industry (“AIMED”), medical devices form an entirely different category as opposed to medicines. In our view, attempting to regulate them through a legislation originally drafted in respect of medical drugs/pharmaceuticals will inevitably be a

India Law News 23 Spring/Early Summer 2012

difficult exercise, given the varied nature of medical devices and the fact that an entirely different set of quality/safety standards would apply to them (as opposed to drugs). In recognition of this need, several efforts have been made to address the situation.

KEY EFFORTS

Certain amendments to the Drugs Act were

proposed by way of the Drugs and Cosmetics (Amendment) Bill 2007 (“2007 Amendment Bill”). It includes a proposal to amend the definition of ‘drug’ in order to expand its scope and include various types of medical devices, including any “medical device, medicated device, instrument, apparatus, appliance, material, software necessary for their application, intended for internal or external use in human beings or animals, whether used alone or in combination, as may be specified from time to time by the Central Government …for the purpose of diagnosis, prevention, monitoring, treatment or mitigation of any disease or disorder; diagnosis, monitoring, treatment, alleviation of or compensation for, any injury or handicap; investigation, replacement or modification of anatomy or physiology; or control of conception, and which does not achieve its intended action primarily by any pharmacological or immunological or metabolical process…” While this proposed definition of ‘drug’ aims to cover a broad spectrum of medical devices generally, it falls short of being a significant step forward as it continues to depend on the specific notification of such devices.

Another proposal in the 2007 Amendment Bill is to

replace one of the central regulatory bodies, i.e. the DTAB with another agency, the Central Drugs Authority, to advise the GOI and State governments on matters relating to both allopathic and Indian systems of medicine. DTAB currently advises the government on technical matters relating to the Drugs Act, which includes medical devices; however, there is a lack of clarity on how a substitute nodal body such as the proposed Central Drugs Authority would impact or even address some ongoing challenges and issues in relation to the regulation of medical devices.

An overview of the proposed amendments vide the

2007 Amendment Bill, currently pending in the Indian Parliament, shows that these amendments would not

be a significant change in direction from the substantive approach to medical devices in the current Drugs Act. The root issues as have been noted by legal commentators and industry, i.e., the problems inherent to using a legislation originally meant for dugs/pharmaceuticals to regulate medical devices, would remain unaddressed.

A more meaningful effort is the draft Medical

Devices Regulation Bill, 2006 (“MDR Bill”), proposed by the Department of Science & Technology, GOI, as a consolidated and comprehensive set of regulations specific to medical devices. In contrast to the regime under the Drugs Act, the MDR Bill is intended as a comprehensive and dedicated regulation of medical devices with special focus on public health and safety aspects. The MDR Bill seeks the establishment of a national level regulator aimed at establishing and maintaining a national system of controls for the quality and safety of medical devices. It covers important aspects right from design, standards and manufacturing to testing, packaging, labeling, import, sale, use, and disposal requirements. Importantly, the definition of a ‘medical device’ in the MDR Bill is in line with internationally accepted norms. The complexity of and wide variety of medical devices is recognized and the classification of devices (and regulation) is according to the level of risk associated with them. The approach is to put in place a principle based substantive law rather than mere procedure and license based regulation. This proposal continues to languish due to objections by various States to its provisions, including a perceived dilution of the powers of State regulatory agencies.

Another effort for a comprehensive regulation has

been made by the DTAB, which formulated a revised set of guidelines intended to replace and expand the existing Schedule M-III under the Drugs and Cosmetics Rules, 1945. The proposed Schedule M-III proposes regulations for inspection and monitoring of medical devices that in some respects even betters the standard proposed by the MDR Bill, e.g., it provides explicit provisions allowing for the withdrawal of devices that may compromise the health and/or safety of patients or users even after it is installed, maintained and used as per prescribed regulations). It also expands the scope of the definition of ‘drug’ under the Drugs Act by providing broader criteria by which various types

India Law News 24 Spring/Early Summer 2012

medical devices will be deemed to be included within the definition of ‘drugs’ under the Drugs Act. Further, like in the MDR Bill, this proposed schedule also seeks to classify medical devices according to risk levels associated with the use of such devices (e.g.: thermometers would be classified as low risk devices while heart-valves would be ‘high-risk’ devices) – the monitoring and regulatory requirements for medical devices would be calibrated accordingly.

However, while the proposed Schedule M-III was

formulated in 2009, it seems to have stagnated. An expert committee was set up in 2009 to review, inter alia, the proposed Schedule M-III and recommend a suitable course of action in relation to the regulation of medical devices but could not take it further – the AIMED and other industry players have made a number of submissions to the DTAB in this regard but there has been little discernible progress. Also, the issue with regulating medical devices through the Drugs Act is not addressed as this proposal seeks to use the existing statutory framework. To our mind, this would not address the fundamental gap in the present system of governing medical devices as ‘deemed’ drugs and pharmaceutical formulations. Therefore, the case for having a comprehensive and full-fledged statute to provide governance and regulation of medical devices in India remains strong.

Unfortunately, any major step forward presents

difficult challenges. On the one hand, there is a clear

need for a focused and dedicated legislation for regulating medical devices in India, and on the other hand, the creation of a centralized regulatory framework causes a perceived dilution in the separate powers of the GOI and State governments.

There is a great need for policy makers and law

makers to step up the efforts to meaningfully set out regulations for medical devices in India. Given the interest and media coverage that this issue has received recently, it is hoped that the concerned powers will make a sustained effort to resolve the difficult issues (including the particular challenge of consensus building among the States and GOI) and pass a dedicated law through the Parliament.

Debashish Sankhari is a Partner in the M&A practice at AZB & Partners and has experience in corporate/advisory and commercial transactions in a broad range of sectors. He can be contacted at debashish.sankhari@azbpartners.com. Shuchi Sinha is a Senior Associate working in the M&A and debt finance practice at AZB & Partners, and has advised clients on investments/financing for various industries including pharmaceuticals, healthcare diagnostics and medical services. She can be contacted at shuchi.sinha@azbpartners.com.

India Law News 25 Spring/Early Summer 2012

o meet their staffing needs in India, many businesses, both domestic and foreign, engage contract labor for the scalability and flexibility it

provides in managing human resource and head count. This approach raises several legal compliance issues that must be dealt with both up-front and on an ongoing basis. This article provides a road map for managing the legal and regulatory risks of engaging contract labor.

WHAT THE LAW PERMITS

In a nutshell, the Contract Labour (Regulation &

Abolition) Act, 1970 (the “Act”) permits companies and establishments (the “Employer(s)”) in the manufacturing and services sectors to engage contract labor through contractors for performing tasks that do not form part of the “core” operations. Core operations are those activities for which a company or establishment has primarily been established. The Act allows the Government to prohibit Employers from employing contract labor in any of its core process or operations. The Government, prior to issuing a prohibitory notification for engaging contract labor in any process evaluates whether –

(a) the process or operation is incidental or

necessary for the Employer; (b) the work performed by contract labor is

permanent in nature; (c) such process or work is ordinarily performed

by regular employees of other similar Employers; and

(d) sufficient number of whole-time employees can be deployed to perform the work.

By engaging contract labor in the incidental activities, Employers can concentrate on developing their core competencies and non-core activities are performed by contract labor whose management is in the hands of contractors who employ and control them. APPLICABILITY OF THE ACT

The Act is applicable to every Employer or contractor who employs or has employed 20 or more contract laborers on any day during the previous twelve months. The Employer is treated as a single unit without reference to the nature of work that is being executed by the contract labor. The workmen include any person who is employed by a contractor to work in a company or establishment to perform any skilled, semi-skilled or unskilled manual supervisory, technical or clerical work.

For example, if a Company X,an IT company, has

executed a contract to provide certain services (say call center or development of certain software) to its client for which Company X requires about 40-50 people to complete the project. The term of the contract is 1 year. However, Company X already has more than 300 employees and does not want to increase its head counts by engaging 40-50 people for performing the contract. It decides to outsource the entire contract to another service provider whose employees’ will provide the services at the site of Company X while Company X will provide the entire infrastructure required to perform the said services. Such arrangements/contracts come within the purview of the Act. However, people employed in managerial or administrative positions are outside the ambit of the Act as they work on contracts directly executed between them and their employer.

MUST KNOWS FOR ENGAGING CONTRACT LABOR IN INDIA By Sunil Tyagi & Namrata Wadhawan

India Law News 26 Spring/Early Summer 2012

The Act is not applicable if the work performed

by a contract labor is of a sporadic nature. It is the Government that decides if the work is of a casual or intermittent nature and its decision regarding the same is final. Basically, any work performed for more than 120 days in a year in a company or establishment is not considered as work of an intermittent nature. Consequently, contract labor is usually engaged by the Employers for performing support services such as security, catering, courier, construction and maintenance, gardening, house keeping, transport etc.

COMPLIANCES UNDER THE ACT

The Act requires both the “principal employer”

and the contractor to fulfill their respective statutory obligations. Principal employer is the one who employs contract labor through a contractor. “Contractor” in relation to an Employer means a person who – (a) undertakes to perform a job for the Employer through contract labor other than mere supply of goods or articles of manufacture; or (b) supplies contract labor for any work of the Employer & includes a sub-contractor.

In case of a factory, any one of the “owner”, the

“occupier” or the “manager” (as per the Factories Act, 1948) is considered a principal employer whereas, in case of a company or establishment, the person who is in control and supervision of such company or establishment is considered to be the principal employer.

As per the Act - (a) the Employer must be

registered with the authorities; and (b) the contractor must have a valid license from the authorities prior to engaging contract labor.

In the case of Workmen of Best & Crompton

Industries Ltd. v. Best & Crompton Industries Ltd., the Madras High Court held that the principal employer must engage contract labor through a contractor who has a valid license, because an invalid license of a contractor would imply direct employment of contract labor by the principal employer. The license issued by the authorities is job specific, and cannot be transferred for any other job and is indicative of the

number of contract laborers a contractor can employ for a given job.

The contractor is responsible for providing all

statutory benefits to contract labor and if he fails, the obligation falls on the principal employer. The Supreme Court in People’s Union for Democratic Rights v. Union of India held that if the contractor fails to fulfill its duties under the Act then the principal employer is under an obligation to provide all amenities and benefits prescribed under the law to contract labor deployed at its establishment. The principal employer must witness disbursement of wages to the contract labor by the contractor (who is essentially the employer of the contract labor). If the principal employer steps in on behalf of the contractor to provide facilities and benefits to the contract labor then such a principal employer is entitled to recover the money spent, from the contractor. Non-compliance with provisions of the Act can lead to imposition of monetary & penal sanctions.

GUIDELINES FOR ENGAGING CONTRACT LABOR

While engaging contract labor, the Employers

must execute contracts with the contractors and such agreements must clearly define the terms of engagement of the contract labor.

The Employer must ensure that it does not

appoint one of its own employees’ as a contractor through whom it engages contract labor. In case of a dispute between contract labor and principal employer, the courts may lift the veil to ascertain the intent of the management and/or check genuineness of such an agreement. If the principal employer is employing and controlling the contract labor through its own employee posing as a contractor then the principal employer is, without actually increasing its head count, controlling the contract labor. In the case of Indian Petrochemicals Corporation Limited v. Shramik Sena, the Supreme Court held that such contracts are sham and bogus and are liable to be set aside.

The Supreme Court in Haldia Refinery Canteen

Employees Union & Others vs. Indian Oil Corporation Limited laid down certain guidelines for engaging contract labor:

India Law News 27 Spring/Early Summer 2012

• Principal employer must not interfere with

the contractor for engaging contract labor. Contractor must have free hand to engage its employees;

• Wages should be disbursed by the contractor,

principal employer must not have any direct role to play except deploy its representative in whose presence salaries are distributed by the contractor to the contract labor (as required under the Act);

• Contractor is liable to pay all statutory

benefits such as provident fund contributions, leave salary, medical benefits, and observe statutory working hours for its employees. Principal employer should avoid managing the contract labor;

• Contractor is responsible for proper

maintenance of registers, records and accounts for compliance with statutory provisions/obligations;

• Contractor should maintain records of

payments of wages etc. and for deposit of provident fund contributions with authorities;

• Contractor is liable to defend/indemnify the

principal employer from any liability or penalty which may be imposed by State/Government authorities for any violation by the contractor of such laws, regulations and also against all claims, suits or proceedings that may be brought against the principal employer arising under or incidental to or by reason of the work provided/assigned under the contract brought by the employees of the contractor, third party or Government authorities.

The Supreme Court in the case of Hindalco

Industries Ltd. vs. Association of Engineering Workers observed that - (a) the workmen were employed for long years and despite a change of contractors the same workers continued to be employed at the establishment and; (b) there was evidence on record to establish the ultimate control of management on

such contract employees. Under such circumstances, the Court would be entitled to pierce the veil and arrive at a finding that the justification relating to appointment of a contractor is sham or nominal and in effect and substance there exists a direct relationship of employer and employee between the principal employer and the workmen.

The principal employer has a right to assess the abilities and skills of the workers employed by the contractor to ensure the quality of service provided under the contract, without actually managing or directing such contract labor. While engaging contract labor, the principal employer must abstain from – (a) controlling their appointment and terms of appointment; (b) controlling them directly or indirectly; (c) taking disciplinary action; (d) supervising their work directly; and (e) dismissing or removing contractor’s employees from service. The principal employer must only exercise a supervisory role to ensure that well qualified & capable people render the required services properly. The principal employer should communicate with the contractor only. ABSORPTION OF CONTRACT LABOR

As stated above, the Act empowers the Government to prohibit employment of contract labor in any process, operation or other work in any company or establishment. Once the appropriate Government issues a prohibitory notification banning engagement of contract labor, it will not be possible for an Employer to engage contract labor on that job, process or operation. The Supreme Court in the case of Air India Statutory Corporation v. United Labor Union held the view that if a prohibitory notification has been issued by the Government then contract labor engaged in those prohibited activities would be considered the direct employee of the principal employer and shall acquire a right to automatic absorption into the service of the principal employer.

In a subsequent judgment of Steel Authority of

India Limited v. National Union Water Front Workers (“SAIL Judgment”), Supreme Court set aside the Air India judgment. In the SAIL judgment, the Supreme Court held that prohibition notification issued by the Government does not mean automatic absorption of

India Law News 28 Spring/Early Summer 2012

contract labor in a company or establishment. It is essential that the court must consider the terms of a contract to establish if the contract under which the labor is appointed for work is a genuine contract or is a mere ruse/camouflage to evade compliance with the provisions of the Act. If it is found that the contract is a camouflage then contract labor must be treated as an employee of the principal employer who will have to regularize such contract labor. However, if the contract is genuine then the principal employer at its own discretion can employ contract labor as a regular employee by giving them preference over others. But under no circumstances, is the principal employer under any obligation to absorb contract labor on its rolls if employment of contract labor in certain activities is prohibited by the Government authorities.

Consequently, certain ancillary jobs in a company

or establishment can be performed by the contract labor engaged through contractors provided the Government has not banned their employment on those jobs and they are given all their statutory benefits. Although contract labor is an effective way for an Employer to have access to additional human resource without increasing its head count, it is pertinent to understand the finer nuances of engaging

contract labor and the related law prior to engaging contract labor so as to avoid unwarranted disputes with them. Sunil Tyagi is a Senior Partner and Namrata Wadhawan a Senior Associate at ZEUS Law Associates. ZEUS is a corporate commercial law firm based in India. One of its areas of specialization is employment law related transactional and litigation work. Sunil and Namrata can be contacted at sunil.tyagi@zeus.firm.in and namrata.wadhawan@zeus.firm.in.

India Law News 29 Spring/Early Summer 2012

Madras High Court Rules That Foreign Lawyers May “Fly-In and Fly-Out” To Provide Advice on Foreign Law to Indian Clients

On February 21, 2012 the Madras High Court in A.K Balaji v. Govt. of India [2012] 18 taxmann.com 283 (Madras) observed that foreign law firms/lawyers may visit India for a temporary period on a ‘fly in and fly out’ basis to advise their clients in India on foreign law/international legal issues.

In the instant case, most of the respondent law firms were carrying out consultancy/support services in the field of protection and management of intellectual, business, and industrial proprietary rights, carrying out market surveys and market research, and publication of reports and journals without rendering any legal service including advice in the form of opinions.

The question involved was whether foreign firms and foreign lawyers are entitled to practice on the litigation side and non-litigation side in any manner within the territory of India or not. The High Court held that:

• Foreign law firms or foreign lawyers cannot practice the profession of law in India either on the litigation or non-litigation side, unless they fulfill the requirement of the Advocates Act, 1961 and the Bar Council of India Rules.

• There is no bar either in the Act or the Rules for the foreign law firms or foreign lawyers to visit India for a temporary period on a ‘fly in and fly out’ basis, for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues.

• Moreover, with regard to the aim and object of the International Commercial Arbitration introduced in the Arbitration and Conciliation Act, 1996, foreign lawyers cannot be debarred to come to India and conduct arbitration proceedings for disputes arising out of a contract relating to international commercial arbitration.

• B.P.O. companies providing wide range of customized and integrated services and functions to its customers like word-processing, secretarial support, transcription services, proofreading services, travel desk support services, etc. do not come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules. However, in the event of any complaint made against these B.P.O. Companies violating the provisions of the Act, the Bar Council of India may take appropriate action against such erring companies.

Therefore in the light of the scheme of the Act if a lawyer from a foreign law firm visits India to advice his client on matters relating to the law which is applicable to their country, for which purpose he ‘flies in and flies out’ of India, there could not be a bar for such services rendered by such foreign law firm/foreign lawyer.

The case presented interesting issues on whether foreign lawyers can come to India for the purpose of offering legal advice to their clients here on foreign law and whether any provision of law prohibits practice of foreign law in India.

Mr. Aseem Chawla is a Tax Counsel, and Ms. Surabhi Singhi is an Associate, Amarchand & Mangaldas & Suresh A. Shroff & Co., both based out of Delhi, India. Mr. Chawla can be contacted at aseem.schawla@gmail.com. Ms. Singhi can be contacted at surabhi.singhi@amarchand.com.

CASE NOTES

By Aseem Chawla and Surabhi Singh

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ABA Section of International Law Your Gateway to International Practice

THE INDIA COMMITTEE PRESENTS:

Coming in October 2012 (exact date to be announced)

A Webinar on Medical Devices Exports and Joint Ventures in India India is one of the largest medical device markets in Asia. This market is expected to grow at 15% a year for the foreseeable future. A growing middle class has led the government to allocate the equivalent of 5% of annual GDP to expand and improve health care in the country. Despite this, it is expected that the greatest demand for medical devices will come from private hospitals and clinics. Currently, 75% of India’s medical device market consists of imports. This webinar will discuss the nuts and bolts of importing medical devices into India, including tax consequences. Panelists will also cover joint ventures for the manufacture of medical devices in India for both the domestic and export market, clinical investigations and quality standards. Topics will include India’s Drugs and Cosmetics Act and Rules, and their implementation by the Central Drugs Standard Control Organization (CDSCO) as the key medical device regulatory organization in India. Specific attention will be given to structuring transactions, the regulatory framework, as well as proposals for creating a comprehensive framework and single regulatory body specifically for medical devices. Moderator: Bhalinder L. Rikhye, Peltz & Walker, New York Speakers: Amy Hariani, Director and Legal Counsel for the U.S.-India Business Council (USIBC), Washington, D.C. Ms. Hariani manages the Life Sciences and Legal and Professional Services portfolios. Rohan Shah, Managing Partner Economic Laws Practice (ELP), Mumbai. Mr Shah is well known for his expertise on advisory, policy and controversial issues related to domestic and international taxation in India. Third speaker to be announced There will be a 15 minute question and answer period

31

Annual Year-in-Review Each year, ABA International requests each of its committees to submit an overview of significant legal developments of that year within each committee’s jurisdiction. These submissions are then compiled as respective committee’s Year-in-Review articles and typically published in the Spring Issue of the Section’s award-winning quarterly scholarly journal, The International Lawyer. Submissions are typically due in the first week of November with final manuscripts due at the end of November. Potential authors may submit articles and case notes for the India Committee’s Year-in-Review by emailing the Co-Chairs and requesting submission guidelines.

India Law News India Law News is looking for articles and recent Indian case notes on significant legal or business developments in India that would be of interest to international practitioners. The Summer 2012 issue of India Law News will carry a special focus on social media and IT issues in India. The deadline for submissions is July 1, 2012. Extensions can be granted on a case by case basis. Please read the Author Guidelines available on the India Committee website. Note that, India Law News does not publish any footnotes, bibliographies or lengthy citations. Submissions will be accepted and published at the sole discretion of the Editorial Board.

SUBMISSION REQUESTS

India Law News 32 Spring/Early Summer 2012

The India Committee is a forum for ABA International members who have an interest in Indian legal, regulatory and policy matters, both in the private and public international law spheres. The Committee facilitates information sharing, analysis, and review on these matters, with a focus on the evolving Indo-US relationship. Key objectives include facilitation of trade and investment in the private domain, while concurrently supporting democratic institutions in the public domain. The Committee believes in creating links and understanding between the legal fraternity and law students in India and the US, as well as other countries, in an effort to support the global Rule of Law.

BECOME A MEMBER! Membership in the India Committee is free to all members of ABA International. If you are not an ABA International member, you may become one by signing up on the ABA website. We encourage active participation in the Committee’s activities and welcome your interest in joining the Steering Committee. If you are interested, please send an email to the Co-Chairs. You may also participate by volunteering for any of the Committee’s projects, including editing a future issue of the India Law News. Membership in the India Committee will enable you to participate in an online “members only” listserv to exchange news, views or comments regarding any legal or business developments in or concerning India that may be of interest to Committee members. We hope you will consider joining the India Committee!

UPCOMING EVENTS Section of International Law 2012 Fall Meeting October 16, 2012 – October 20, 2012 Fontainebleau Resort Miami Beach, FL USA Format: Live/In-Person Medical Devices Exports and Joint Ventures in India October 2012 Location: N/A Format: Teleconference/ Webinar

INDIA COMMITTEE LEADERSHIP (2011-2012) Senior Advisor Aaron Schildhaus Law Offices of Aaron Schildhaus, Washington, DC Immediate Past Co-Chair Erik Wulff DLA Piper US LLP, Washington, DC Co-Chairs Vandana C. Shroff Amarchand & Mangaldas & Suresh A. Shroff & Co., Mumbai, India Priti Suri Priti Suri & Associates, New Delhi, India Hon. Sanjay T. Tailor Circuit Court of Cook County, Illinois Vice Chairs Douglas Ochs Adler Vedder Price, Washington, DC Hanishi Thanawalla Ali Mithras Law Group Poorvi Chothani LawQuest, Mumbai, India Anand Desai DSK Legal, Mumbai James F Grandolfo Jr. Allen & Overy LLP Rina Pal George Washington University Law School Fabio Alberto Regoli Jacobacci Sterpi Francetti Regoli de Haas & Association Rita Roy Toronto Sajai Singh J Sagar Associates Shikhil Suri Crowell & Moring, Washington DC Eugene Theroux Baker & McKenzie, Washington DC Ajay Verma Ajay Verma & Associates, Delhi