As a startup progresses from inception to commercialisation to scale, one of the most pertinent factors that will shape its operations and strategies is adherence to governmental regulations. In a diverse country such as India, where laws and governments are sometimes localized, compliance can quickly become a challenge for any startup that does not plan for it in advance. Based on our startup assessments and industry interactions with people such as Joga Rao of Legalexcel and many others, we share some of the key regulatory questions around some sub-sectors such as – home health, telemedicine, and AI & Analytics.
Generally, applicable regulatory legislation will depend upon the state where the startup will operate or where its functional activity will take place.
A health service oriented business in Karnataka, for instance, may have to comply with a series of state-based regulations for different aspects of its business including the Karnataka Private Medical Establishments Act or Clinical Establishments Act; MCI/SMC registration for medical practitioners; regulatory clearances under PCPNDT Act and Atomic Energy Act for any equipment;
pharmaceutics drugs license for relevant products; appropriate regulatory compliance for disposal of any biomedical waste, etc. In addition to state-level regulations, a startup will also have to comply with local government laws with regards to building standards, fire safety procedures, etc.
The novelty of the health sub-sector and the maturity of its legal landscape need to be carefully factored into a startup’s regulatory strategy. For instance, in sub-sectors such as AI/Analytics, and Tele-Medicine, there are no explicitly and specifically provided regulatory norms. However, aspects of a startup’s business operating within these sub-sectors may still fall under predefined regulations.
In sectors like online pharma, harmoniously interpreting relevant provisions of Information Technology Act, 2001 and Drugs and Cosmetics Act, 1940 (including Rules passed there under) ensures relevant regulatory compliance is fulfilled.
Many home health providers seek regulatory approval under Private Medical Establishments Act, despite the fact that this regulation does not specifically deal with the service-oriented nature of the homecare business. In addition, there are no labour legislations specifically applicable to ‘Home Health Business’ and application of a particular labour legislation generally depends upon the nature of functional activity and number of persons employed in that entity. Some of the applicable labour legislations (illustratively) are:
- Shops and Establishments Act (of the concerned State);
- Payment of Wages Act;
- Minimum Wages Act;
- Industrial Disputes Act;
- Industrial Standing Orders Act;
- Employees Provident Fund Act;
- Employees State Insurance Act.
Currently, there is no statutory guidance for collecting and using data for AI based concepts. As such, start-ups tend to create binding and enforceable relationships with those concerned through contractual terms and conditions. In practice, data can generally be stratified into anonymized vs. non-anonymized data to protect privacy. Very recently, Central Government has put up draft DISHA (Digital Information Security in Healthcare Act, 2018) in public domain for comments.
When it comes to execution, there are multiple organizations involved in defining and ensuring regulatory compliance. For instance, the Central Drugs Standard Control Organization (CDSCO) is the drug regulatory agency of Central Government, empowered to implement the provisions of Drugs and Cosmetics Act, 1940 (including related rules and regulations). Primarily these provisions deal with approval of new drugs, regulation of clinical trials and regulation of imported drugs. In addition, CDSCO plays a significant role in coordinating with various states to enable and ensure uniformity in the enforcement of the Act, and also works in close context with Central Drug Laboratories (CDLs) to undertake and perform quality control tests.
The Drugs Controller General of India (DCGI) is another important stakeholder, responsible for the approval of licenses of specified categories of drugs as well as overseeing clinical trials. DCGI is the key Indian regulatory authority and grants approvals based on review of clinical data and ascertainment of manufacturing quality. Depending on the nature of the startup, the International Standards Organization (ISO) may be another relevant authority to consider. The ISO provides standardized certification the benefits of which include market potential, improved efficiency, cost cutting and more significantly, multiplied customer satisfaction.
This is the second part of the series of healthcare articles on Essential hacks for healthcare startups. You can read the first part on patent filing here and third part on product distribution here. This article was originally published on ET Healthworld >