by Aggarwals Associates | Dec 8, 2022 | General
The usage of digital health in India is governed by a few laws, guidelines, and standards. Several regulations are universally applicable to digital health technology, even though each digital health tool/business model is governed independently. In this regard, the Information Technology Act of 2000, the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules of 2011 (SPDI Rules), and the Information Technology (Intermediaries Guidelines) Rules of 2011 (Intermediaries Guidelines) are all relevant. The IT Act, SPDI Rules, and Intermediary Guidelines are all part of India’s general data protection framework. Online transactions and the transfer of electronic data are now allowed thanks to the IT Act. The IT Act regulates a wide range of online activities, including the authentication of digital signatures and the legal validity of electronic records. The IT Act addresses cybercrime like hacking and denial of service attacks, as well as other types of cybercrime.
ISSUES:
- What are the laws applicable to the usage, commercialization, and circulation of mobile apps and other electronic devices in India?
- Who are the certifying authorities for the usage of electronic records and mobile apps in the pharma industry in India?
APPLICABLE LAWS:
- Information Technology Act, 2000.
- The Drugs and Cosmetics Act, 1940.
- The Drugs, Medical Devices, and Cosmetic bills, 2022 (which is yet to be passed)
SOLUTIONS APPLICABLE:
LAWS applicable to Mobile Apps
- Key Areas governed under the IT Act, 2000, and Drugs and Cosmetics Act, 1940:
There is no law exclusively to govern the enforcement of mobile apps in the pharmaceutical sector. The current law which focuses on such area is the IT Act and the Drugs and Cosmetics Act. Online and traditional pharmacies were not distinguished by the Drugs and Cosmetics Act of 1940 or its Rules of 1945. Initially, there were no laws in India governing how e-pharmacies operated. The pre-independence era’s drug regulations were not updated to take into account advancements in electronic and information technologies, as well as changes and innovations in pharmacy practice and dispensing. In order to employ information technology in the usage and distribution of medicines in India, the Indian government started working on developing a centralized online e-plat form in 2016. An electronic platform will serve as the nation’s first-ever tracking system for medicines from producer to patient use. The “Sugam” program was first used by the Health Ministry for this purpose.This is one such instance where the IT Act had a major role to play in the pharmaceutical sector. Key areas for enforcement include standards that safeguard the security, confidentiality and privacy of patient health and records. Data protection and infringement are crucial for enforcement due to protected private health information and records used solely for data interpretation for market analysis, marketing, and regulatory exchange.
Areas Governed under the Drugs, Medical Devices and Cosmetics Bill, 2022
India’s regulatory framework for pharmaceutical products has to be completely revised. The draught Drugs, Medical Devices, and Cosmetics Bill, 2022 falls short of implementing the necessary reforms to safeguard Indian citizens’ health and safety and to elevate the country’s pharmaceutical and medical device sector to the level of a true global competitor.The main cause of this is the lack of a statutory, independent regulator. In accordance with World Health Organization recommendations on the regulation of pharmaceutical products, the majority of developed nations have a specialized, statutory regulator for pharmaceuticals and medical devices that enjoys some degree of independence from the government. The present Act does not provide any specific provision to govern the mobile apps which are used in the pharmaceutical sector. Hence, for the purpose of regulating mobile apps, such a bill was introduced. But this bill is yet to be passed.
Laws Applicable to Electronic Records used in Pharmaceutical Industry:
- Electronic Health Record Standards in India
The Electronic Health Record (EHR) Standards for India were notified by the Ministry of Health & Family Welfare (MoH &FW) in September 2013. Keeping in mind their suitability for and applicability in India, the set of standards provided there were selected from the best accessible and utilised standards applicable to Electronic Health Records from around the world. The recommendations in this paper are pertinent to the implementation of electronic health informatics standards in EHR/EMR and other clinical information systems of the same nature. The focus is on identifying the standards and their intended uses in these systems, followed by a brief implementation strategy guideline. It is acknowledged that correct implementation of these standards will result in the standardization of data capture, storage, view, presentation, and transfer to a point where the meaning and data included in the records will be interoperable. Wider implementation situations, such as those of administrative, legal, or regulatory character, are not covered by this document. Additionally, this paper does not address issues related to the development and management of local, regional, or national infrastructures, indexes, or repositories because those issues are handled by regulatory organizations. The idea that any person in India can visit any healthcare practitioner, diagnostic facility, or pharmacy and still have access to and have always-available, fully integrated electronic health records has been not only liberating but also the future of effective healthcare delivery in the twenty-first century.
NAGARJUN.S
Intern at Aggarwals & Associates, S.A.S. Nagar, Mohali
by Aggarwals Associates | Dec 6, 2022 | General
Every nation has a regulatory body that is tasked with enforcing laws and issuing directives to control the marketing of pharmaceuticals. Non-clinical research on a drug should be done after a lead drug molecule has been identified to ensure efficacy and safety. Clinical trials can then be carried out following the submission of an application to the relevant national authorities. Every pharmaceutical company at the time of medicine development and production; pre-clinical and clinical trials; ensuring safety, quality control, and checking standards require legal assistance. The only difference between them is the compliance factors and conditions. Let us discuss in detail the legal support needed by pharma companies in all these circumstances.
ISSUE:
The main issues which must be considered while providing legal assistance are,
- What kind of legal support do these companies require?
- Is there any certifying authority for approving the legal submissions made by such pharma companies?
APPLICABLE LAWS:
The laws applicable for the purpose of governing the pharma companies are:
- The Drugs and Cosmetics Act, 1940
- Medical Devices Rules, 2017
- New Drugs and Clinical Trial Rules, 2019
- CDSCO Good Clinical Practice Guidelines
- National Ethical Guidelines for Biomedical and Health Research Involving Human Participants.
SOLUTIONS OFFERED:
- For the purpose of Medicine development and production
The legal support that these companies require for the medicines development and production is: –
- To procure license from DCGI for the purpose of market entry
According to Section 122A of the Drug and Cosmetics Act, new medications that have been approved and used for a number of years in other countries are exempt from the requirement for clinical trials. According to the Drugs and Cosmetics Act 1940 and Rules 1945, all stages of clinical trials are necessary for drug compounds that are discovered in India. In accordance with Section 2.4(b) of Schedule Y of the Drugs and Cosmetics Act 1940 and Rules 1945, applicants for drug substances discovered in nations other than India are required to submit data from those nations, and the licensing authority may either require that he repeat all the studies or grant him permission to move on to Phase III clinical trials.
Before a drug product may be licenced for import or for the applicant to manufacture a new drug, Central Drugs Standard Control Organization must first see proof of its safety and effectiveness for use in people (CDSCO). The information necessary for approving an application to import or produce a novel drug for marketing is described in the regulations under the Drugs and Cosmetics Act of 1940 and its rules 1945, 122A, 122B, and 122D. Documents such as Generic name, Patent Status, Brief information of physio-chemical/biological status of the drug along with other technical information such as the Stability, Specifications, Manufacturing process, Worldwide regulatory status, Animal pharmacology and toxicity studies, Published clinical trial reports, Proposed protocol and pro forma, Trial duration, During master file and undertaking to Report Serious or Life-threatening Adverse Drug Reactions must be submitted to the Drug Controller General of India (DCGI). And the DCGI after verifying the same, if it is satisfied then it may grant the approval certificate.
- To comply with the guidelines and directions issued under the new Drugs and Clinical trial rules, 2019.
The next mandatory step is that the companies must follow the guidelines and directions issued under the new Drugs and Clinical Trial Rules, 2019. If these two requirements are fulfilled then the company can look forward for expansion of its market.
- For the purpose of pre-clinical and clinical trials
A clinical trial is basically an experiment conducted on humans to see and check the outcome and impact. For this purpose, the company needs certain legal backups to carry out this process without any hindrance.
The legal support that the company needs at the time of pre-clinical and clinical trial are:
- Authorisations from the concerned authorities
The concerned authorities are the independent ethics committee and the Drug Controller General of India. Academic clinical trials, which are ones that use an already-approved medicine but whose results are exclusively meant to be used for academic and research purposes rather than being submitted to the DCGI for drug approval, do not need DCGI approval. The academic clinical trial must still receive clearance from the institutions or a separate ethics committee. After authorizing the trial, the committee must notify the DCGI regarding the approval, if it is doubtful of the study’s nature. The DCGI’s clearance is assumed if no objection is received from the DCGI within 30 days.
The New Drugs and Clinical Trial Rules, 2019 stipulate the subjects involved in clinical trials; voluntary permission must be obtained. As part of the informed consent procedure, the subject must be informed about the fundamental components of the clinical trial and their right to compensation in the event of any harm or death which may result in the clinical trial. The New Drugs and Clinical Trial Rules, 2019 specify the format of the informed consent form, along with a checklist of the information that must be given to the subject during the informed consent process. The investigator of the clinical trial is required to document the subject’s consent in writing on the informed consent form. Audio-video recording is necessary for the informed consent process.
- For the purpose of quality, efficiency, safety controls and circulation of medicines
Manufacturers and importers of pharmaceuticals can have their facilities inspected by the DCGI, state licensing bodies for drugs, and drug inspectors. The authority may order the manufacturer or importer to recall the drug from the market if it is discovered to be harmful or in violation of the Drugs and Cosmetics Act, after giving the manufacturer or importer a chance to explain the situation. For new medications and experimental medical equipment, it is required to submit frequent safety updates and reports on adverse events (for a set length of time). Manufacturers and importers must abide by the standards on recall and quick alert systems for pharmaceuticals established by the Central Drugs Standard Control Organization (CDSCO) in the case of a mandatory or voluntary recall.
The complex regulatory regime governing the pharma sector can be adhered to only if the pharma companies comply with those procedural and statutory requirements. This strong compliance can be ensured only when the laws governing such industries are more stringent. Hence, these are the various procedures that require legal guidance which is essential for the day-to-day working of the companies.
-NAGARJUN.S
Intern at Aggarwals & Associates, S.A.S. Nagar, Mohali
by Aggarwals Associates | Dec 5, 2022 | General
Numerous difficulties are faced by the founder of start-up with respect to the smooth functioning of business in future. A hardworking founder and their employees are the key of the successful business. A definite awareness of the fundamental laws, rules, and regulations applicable for the business’s smooth operation is just as important as having a strong focus on consumers and the market.
What is the procedure for establishing a business and the applicable law on every stage?
Type of Business: There are four types of companies that can be established under different enactments.
- Single proprietorship Business: Generally these types of business are acquired by the founders on a small scale business. There is no requirement to register the company. Moreover, the person running the business is solely responsible for its operation and the liability arises from the said business.
- Partnership Firm: Minimum 2 members can establish a partnership firm and it is completely optional to register the firm. The promoters of the company stand responsible for the operations of company.
- Limited Liability Partnership: The limited liability Partnership is different form partnership firm as the registration of LLP is mandatory. The LLP has to be registered with Ministry of corporate affairs under the LLP Act, 2008. Minimum 2 members can establish a LLP and they have limited liability towards the company to the extent they have contributed.
- Private Limited Company: The private company needs to be registered with the Companies Act, 2013. One person can start a private limited company and, it is advisable to start a private limited company if the company needs to raise funds from the external ways. This type of company has perpetual succession and the ownership can be transferred by transferring the shares.
In addition to it the company can avail the benefits of start-up India plan by making them register in the plan on StartupIndia.gov portal.
Licensing: The business needs to be licensed according to the nature, size and type of business. There is different kind of licenses that needs to be obtained before starting any company such as drug license for establishing a business that deals with drugs. The lack of business license can create big troubles in the future that eventually lead to the lawsuits, therefore, it is always recommended to obtain license before starting any business if required under any legislation.
Labour laws: The founder or the employer needs to adhere different labour law legislation for the smooth functioning of the business, as the employees are the important human asset of the company that needs to be retained in the company for the long term. There are several laws related to the Gratuity, PF funds, Maternity benefits, hence it is advisable to consult a legal advisor to know get the information regarding labour laws that are applicable on that particular business. Some of the common labour laws are:
- Industrial Dispute Act, 1947
- Trade Union Act, 1926
- The Employee’s State Insurance Act, 1948
- Maternity Benefit Act, 1961 etc.
The company can seek exemptions from labour inspection for five years under nine different laws by registering themselves under start-up India Plan and submitting self declaration form within 1 year of incorporation.
IPR (Intellectual Property Rights) Laws: As the company is starting up with a creative ideas and products that needs to protected from competition and multiplication. The founder needs to be well versed with the IPR laws to protect the intellectual rights of the company. Also the Government of India provides various schemes and subsidies for start-up companies.
Taxation and Accounting Laws: Every company needs to pay tax as per the recent slabs, so it is important to know the laws that are applicable to the particular company with respect to tax and accounts, as the account have to be prepared according to the guidelines provided by legislation. The Government of India provides certain exemption to start-up companies in order to promote the start-ups in India. In order to avail certain condition the company needs to fulfil certain condition provided under law.
FEMA (Foreign Exchange Management Act) Act, 2000: According to Sec 6 of the FEMA Act, investors from abroad can contribute 100 percent to the Indian start-up with or without the approval of Reserve Bank of India depending on the type of business.
Winding Up: If the company faces some unfavourable circumstances, then the founder needs to wind up the company by following any of the method prescribed by law. The company can be winded up by:
- Fast track exit mode: This is the most recommended type for winding up a company as it is the easiest and cheapest way to windup a start-up company. The company can be winded up by the Registrar of company by fulfilling certain conditions such as information about the assets and liabilities, their ongoing start-up companies etc.
- Court route: The founder of the company can approach court for winding up the company. It is the lengthiest procedure as it involves several meetings and long court proceedings.
- Voluntary closure: The Company can be winded up if the shareholders and creditors want to wind up with the mutual decision. It is difficult to wind up by this method as the approval of both is a big issue.
As there are different laws applicable on different business, the founder has to study all the aspects respected to his business and the applicable laws. Therefore, it is essential to consult a legal advisor for getting information about the applicable laws, the points to be added in different agreements related to business to avoid future calamites that may lead to the legal suits or winding up of company.
-Surbhi Singla
-Associate at Aggarwals & Associates, S.A.S Nagar, Mohali.
by Aggarwals Associates | Dec 2, 2022 | General
Innovation and entrepreneurship are crucial for a state’s economy to grow. The State of Punjab is known for making quick advancements in overall prosperity and growth. The State has achieved success in a wide range of fields, including business, agriculture, education, health care, literature, sports, and the arts and humanities. Punjab has been endowed with excellent infrastructure, human resources, and energetic, forward-thinking citizens who work hard to turn any chance into a roaring success. Additionally, the State has recognized start-ups and entrepreneurship as the fundamental pillar for economic expansion, job development, competitiveness, and wealth generation.
POLICIES BROUGHT IN BY THE STATE OF PUNJAB:
- Punjab Industrial and Business Development Policy, 2017
The current programme introduces radical changes, reorganizes institutions, and provides a comprehensive foundation for the State’s sustainable industrial growth. Infrastructure, Power, MSME, and Ease of Doing Business are the eight main strategic pillars around which the policy is built. Start-up and entrepreneurship, skills, financial and non-financial incentives, and stakeholder engagement, are all supported by sector-specific growth strategies. The MSME sector’s growth is greatly accelerated by the policy. In addition to conventional industrial businesses, the programme also intends to foster the growth of service industries.The strategy envisions significant alignment and synergy with the relevant sectoral policies of the Central Government and will concentrate on making the best use of and further expanding upon them. This is in keeping with the cooperative federalism philosophy.
In adherence to the Industrial and Business Policy, 2017 the Government of Punjab initiated the Start-up Punjab Policy. A state’s economy significantly depends on entrepreneurship and inventiveness. In terms of general prosperity and growth, the state of Punjab is regarded as a leader. The state has achieved success in a variety of fields, including agriculture, industry, education, health, literature, sports, arts, and culture. Punjab is blessed with top-notch human resources, infrastructure, and business-minded individuals that strive to make the most of any opportunity that comes their way.
Additionally, the State has identified entrepreneurship and new business creation as crucial pillars for economic growth, job creation, productivity, and wealth generation. Based on the Start-up Action Plan and Stand-up India programme of the Government of India, the Start-up Punjab and Entrepreneurship Development Policy has been introduced.
AGENDA OF STARTUP PUNJAB POLICY:
- To address the problems in the market, enterprise, knowledge, product, ideas, and culture in order to create a favorable ecosystem.
- To build the infrastructure and atmosphere required to support entrepreneurial operations.
- To promote connections amongst industry academies in developing an entrepreneurial culture.
- To streamline laws and norms in order to establish a supportive climate for startups.
- To support 1000 companies over the course of five years.
- To establish 10 incubation accelerators in Punjab with a focus on information technology, agro-food processing, life sciences, and digital manufacturing.
- To create solid connections with the most important State institutions.
- To support over 50 Entrepreneurship Development Centers at colleges and universities throughout the State.
WORKING OF STARTUP PUNJAB POLICY:
- ENTREPRENEURSHIP AND STARTUPS
Punjabi’s are known for having an entrepreneurial mentality. This is exactly what sparked the Green Revolution and helped the State become a center for small and medium-sized businesses. The State looks forward to creating a strong ecosystem for fostering innovation and startups with the inauguration of Start-up Punjab. The State would make sure that various Central and State initiatives that support startups, innovation, and entrepreneurship have the required convergence and synergy. It would promote collaboration between multiple academic institutions with a track record of conducting research and innovation and other organizations that run incubators and accelerators.
- COLLEGE AND UNIVERSITY INCUBATORS
The establishment of incubation centres in colleges and institutions across the state would be encouraged by the state. These facilities are essential for encouraging an entrepreneurial mindset among students. Instead of only helping students’ find jobs once their studies are through, it instills in them the idea of entrepreneurship. This would enable students and business owners to benefit from a creative, stimulating, and inventive atmosphere in addition to the knowledge of strong business ownership concepts and practices that the incubator programs would provide. Through incubation centres, efforts are being made to establish a strong network between academia and industry.
- IKG UNIVERSITY OF TECHNOLOGY IN PUNJAB
IKG Punjab Technical University has established a Start-up Fund of INR 100 Crores in collaboration with the State Government to lend a helping hand to the State’s youth and assist them to develop into entrepreneurs. This money would go toward scaling up funding for businesses, promoting incubation facilities, and providing other assistance to start-up units. A quarter of the funding would be used to support women and members of scheduled castes who are starting businesses.
- DEVELOPMENTAL CENTERS
Other government organizations’ incubators: Several Central and State Government organizations, including the STPI Incubation Centre and the Biotech Incubator, have established numerous Incubation Centers. These centers would be properly and efficiently promoted with the required connections to business and state government initiatives. Additionally, the State of Punjab would fund and encourage private sector-led incubation centres, accelerators, and venture capital firms. To encourage the growth of incubation centres in the private sector, various fiscal and non-fiscal incentives will be offered.
- INDUSTRIAL INCUBATORS
The State encourages the establishment of sector-specific incubators for technologies such as digital manufacturing, biotechnology, life sciences, information technology, and agro and food processing in order to boost entrepreneurship in the priority sectors for the goal of development. These incubators would be built within and close to the state’s current industrial clusters.
Nagarjun.S
Intern at Aggarwals & Associates, S.A.S. Nagar, Mohali
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