Medical Equipment Market and Regulatory Scenario in

Sri Lanka

Dr. G. Gautham Shenoy

Professor

Dept. of P’ceutical Chemistry

MCOPS

Manipal University

Manipal

Mr. Sudhakar Mairpadi

General Manager

(Quality and Regulatory)

Philips Health Care Sector

Gurgaon

Haryana

CONTENTS

1. Introduction.

2. Objective.

3. Factors affecting the medical equipment market Scenario in Sri

Lanka.

3. Total Expenditure on health.

4. Expenditure on capital formation.

6. Purchase mode in public sector

7. Medical Equipment market.

8. Registration of a company in Sri Lanka.

8. Registration of medical devices to CDDA Sri Lanka.

9. Registration of medical devices to Atomic Energy Authority

Sri Lanka

10. Import registration and procedure

11. Comparison- Regulatory requirements in India and Sri Lanka

12. Conclusion.

INTRODUCTION1. Demography.

2. Economy.

3. Disease Pattern.

4. Health policies.

5. Regulatory Authorities.

OBJECTIVE1. To understand the health profile of the country.

2. To analyze the Total Healthcare Expenditure and its trend.

3. To analyze the fraction of THE spent on capital formation.

4. To analyze the critical parameters that would affect the business trend,

market size and its expansion.

5. To understand the market size of medical equipments.

6. To evaluate the possibilities of penetrating and expanding the market

size.

7. To understand the regulatory requirements for the process of registration,

importation requirements of medical equipments in Sri Lanka.

Factors affecting the medical equipment market Scenario in Sri Lanka.

1. Demography.

2. Disease Pattern.

3. Economy.

4. Health Policies.

5.Total expenditure on healthcare.

1. DEMOGRAPHY

Ageing trend comparison past present and the future

Year Percentage of older population

1995 8.1

2005 9.7

2015 12.3

2020 14.5

2025 17.2

0

2

4

6

8

10

12

14

16

18

1995 2005 2015 2020 2025

Ageing trend comparison

%of elder

population

Year

2. DISEASE PATTERN.

Sri Lanka is experiencing the double burden of diseases, as the

country is facing an epidemiological transition, while still

being affected by Communicable Diseases, non communicable

diseases such as cardiovascular diseases, mental disorders,

diabetes mellitus and cancer are emerging more strongly in the

morbidity and mortality patterns. In 2004 cardiovascular

disease ranked 1st as the leading cause of hospital deaths,

prevalence of diabetes has doubled in ten years.

Cases per 100,000 population  

Diseases Year  

1980 1985 1990 1995 2000 2005 2010

CVD117.3 163.9 163.2 263.3 313.2 353.9 510.2

Cancer 128.3 121.3 142.1 190.1 260.2 282.2 510.2

Mental Disorders 298.0 315.9 337.9 434.0 490.4 465.9 -

Diabetes 65.6 86.6 87.5 78.6 204.8 256.2 380.2

Trend of hospitalization due to NCDs

3. ECONOMY Sri Lanka is a mixed economy country, where both public and

private sectors are engaged in production process. Foreign

investments are encouraged . Sri Lanka is committed to a free

market ideology and has one of the most liberal foreign regimens

in the world.

Sri Lanka is a lower middle income developing nation with per

capita income of 2000 USD.

Despite the brutal war the country’s economic growth was

around 4.5 percent. Economy grew more rapidly at the rate of 6

percent in 2003. The expected growth rate is percent in 2010.

3. TOTAL EXPENDITURE ON HEALTHCARE.

The healthcare network is run by both the public and private sector.

The government has managed to maintain a network of public

health, around 608 hospitals that are widely accessed and used by all

income groups. The number of private sector hospitals has also

increased considerably, in the 1990s there were only around 85

private hospitals but at present there are 152 private hospitals.

The public healthcare expenditure as percentage of total healthcare

expenses was 5.3 percent in 1970s, declined to 3.48 percent in 1990s

and again raised to 3.94 percent in 2000s.

The private expenses have risen consistently and modestly which is

higher than the public expenditures. Expenditure for NCDs are

already the major complication of spending in Sri Lanka and their

share is likely to increase in the next few decades, particularly those

for CVD, DM, Cancer and mental disorders.

Budgetary

Resources

Year

TEH as percentage

of GDP

1995 2005 2015 2025

3.5 4.1 4.5 4.6

PEH as percentage

of GDP

1.6 1.9 2.3 2.5

Pvt. EH as

percentage of GDP

1.8 2.2 2.2 2.1

Estimated health expenditure by finance sources

3.B Fraction of THE spent on Capital Formation.

The private sector has grown to take up the demand for applicability of

high tech medical equipments like MRI, CT scan in a proficient way

is also a reason for growth of private healthcare sector.

The trend of expenditure on capital formation by government sector

ranges from 10 to 14 percent of total healthcare expenditure in which

significant part is financed by donor funding. The trend of capital

expenditure in private sector is growing faster than in public sector.

The share of capital formation of the total private expenses was 15 to

31 percent between 2000 and 2010.

Year Capital Expenditure on Medical Equipments

(In SLR millions)

2005 1336

2006 2062

2007 2773

2008 3761

2009* 4204

2010* 7255

Budgetary allocation on capital formation in public sector (Medical Equipments)

Estimated budgetary allocation on capital formation

0

1000

2000

3000

4000

5000

6000

7000

8000

1990 1995 2000 2005 2010

In S

LR

(m

illi

on)

Year

Estimated budgetary allocation on capital formation in last 20 years

Year In SLR million

1990 194.04

1995 381.1

2000 781.62

2005 1558.7

2010 7255

Purchase mode in public sector

The various mode of public procurement are-

a) International Competitive Bidding

b) Limited International Bidding.

c) National Competitive Bidding.

d) Direct Contract.

e) Shopping and

f) Emergency

The choice of procurement method depends on-

a) The nature of goods to be procured.

b) The value of procurement.

c) The local availability and cost of goods.

d) Critical dates of delivery.

e) Agreement with funding agency and

f) Transparency of procurement procedure.

MEDICAL EQUIPMENT MARKET

The Medical Equipment Market in Sri Lanka is totally dependent

upon import. The Market in Sri Lanka is still in the budding stage,

i.e. the market for medical equipments is opening up. The demand

for these equipments and technologies has increased exponentially

in the recent years.

Today the total medical equipment market is around 40 million USD.

Sri Lanka is one of those countries that permits the import of

refurbished medical equipments on the same terms as that of

new equipments are imported.

The refurbished medical equipment market share is two to five

percent of the total equipment market.

The refurbished market is exclusively operated in private sector,

i.e. public purchase of equipment is always for new medical

equipments through release of tenders.

The equipments mainly sold in this market are radiological

equipments, dental equipments etc.

Medical equipment market in Sri Lanka

Year Total Market Size

(USD mn)

Total Export (USD mn)

1996 22 221997 24 242001 23 232002 25 252003 28 282008 40 40

0

10

20

30

40

1996 1997 2001 2002 2003 2008

US

D (

mil

lion

)

Year

REGULATORY SCENARIO Pharmaceuticals, Drugs, Devices and Cosmetics need to be registered

with the CDDA of the Ministry of Health (MoH) of Sri Lanka. Only

products registered to CDDA can be manufactured, imported,

transported, and sold in the country.

Every foreign manufacturer/Exporter has to appoint a local agent in Sri

Lanka. The local agent on behalf of the company is responsible for

registration and other activities related to their products in Sri Lanka.

The registration of Cosmetic, Devices and Drugs are governed by the

CDD Act of 1980 and regulation thereto of 1985 and the subsequent

amendments. This act is administered by the Director General of Health

Services who is the authority for the act (CDDA).

REGISTRATION OF DEVICES TO CDDA

Registration of Medical Equipments to the CDDA Sri

Lanka is a two phase process. In the 1st phase a temporary

license is issued for a period of one year. In the 2nd phase a

permanent license is issued.

First Phase (Issue of Temporary License):

The applicant (Local Distributor/Agent) applies for the

registration of particular medical device to the Office of

D/MT&S. The documents required are as follows-

1. Form-A of Schedule I.

2. Form-B of Schedule I (three copies).

3. Regulatory Approval from any Developed Countries Regulatory

Authority, like FDA, CE Marking, TGA, Health Canada.

4. Free Sale Certificate.

5. Certificate of Exportability.

6. Certificate from the Health Authorities of the country in which

it is produced, confirming that the device is in use there and the

period f use and if not, reasons for not marketing it in the country

of manufacture.

 

7. Fully packed samples of the device in the form that will be offered

for, to enable study of the product.

8. Specimen Label and Package.

9. Technical Manual.

10. Instruction for use.

11. Fee receipt.

Second Phase (Issue of permanent license)

After completion of one year, the applicant apply for permanent

license.

The documents mostly required are-

1. Application form with a copy of registration license issued.

2. Record/data regarding the performance of the equipment.

3. Documents pertaining to its utilities and facilities.

On checking the authenticity of attached documents and if found of

the standards prescribed permanent license is issued for five

years.

REGISTRATION OF DEVICE TO AEA SRI LANKA

The Atomic Energy Authority is the apex body on promotion of

peaceful application of nuclear technology. It is a statutory Body

which comes under the Ministry of Science and Technology.

The AEA is empowered by the Act, to regulate use, transport,

import, export and dispose of radioactive sources.

The application for authorization process to AEA Sri Lanka is

filed only after completion of registration to CDDA.

The registration/authorization of imaging diagnostic X-ray

equipments to AEA Sri Lanka is a is a three phase process.

The phases are-

1. Application for authorization to obtain import license- Form I-

5

2. Application for authorization to import imaging diagnostic X-

ray equipments-Form I-1 and

3. Application for authorization to sell/hire/loan imaging

diagnostic X-ray equipments- Form J-1.

The entire process takes around two months.

Practices Type of Apparat

us

Forms Requir

ed

Fee per unit (in SLR)(excluding import/export fee)

Diagnostic X-ray Units

1.Dental2.General-Portable-Mobile-Fixed3.CT and Others4.Fluoroscopy5.Manography

Form I-5

Form I-1

Form J-1

New Application

With 15% VAT

Renewal of application

With 15% VAT

2500 2875 2500 2875

4700 5405 4700 5405

5900 6785 5900 6785

Forms and Fee Structure for obtaining authorization in each category

IMPORT REGISTRATION AND PROCEDURE

The import and export process is mainly controlled by Custom

Department.

The documents required are-

1. Five copies of CusDec Form I and II (Form 53).

2. Commercial Invoice.

3. Delivery Order

4. Bill of lading

5. Packing list

6. Catalogue/literature.

7. Certificate of Origin.

8. Import control license and

9. Exchange documents.

S. No. Type of charges Amount payable

01 Documentation fee 2.5 USD

02 Document processing fee 3.95 USD

03 GST 10.5% of consignment

04 SLPA 1000-2000 SLR (LCL)

2000-4000 SLR (FCL)

05 Excise duty Exempted

06 Cess Exempted

Various charges payable to custom on import

Parameters India Sri Lankan

Registration

requirement

for medical

equipments

to

Regulatory

Authorities

a. Process One step process Two step process

b. Regulatory Authority CDSCO and AERB CDDA and AEA

c. Application Form - 40 Form A and B of

Schedule- I

d. Registration granted. Form - 41 Form C of

Schedule-II

e. Fees 1500 USD for premises

and 1000 USD for

equipments

USD 250

f. Time length Six to nine months Four to six months

g. Validity Three years Five years

Registration to

Atomic Energy

Authorities

a. Authority AERB AEA

b. Applications AERB/445/MDX_Appform Form I-5

Form I-1

Form J-1

c. Registration fee Rs. 5,000 to 10,000 (depending

upon the type of equipment)

SLR 2,800 to 6,800

(depending upon the

type of equipment)

d. Time length _ 2-4 months

e. Validity 3 years 1 year

Import

registration

a. License

applicati

on

Form 8 and Form 9 Form – A of Schedule IV(for

devices other than imaging

diagnostic equipments); Form I-1

for imaging equipments

b. License Form 10 Form – B of Schedule IV (for

devices other than imaging

equipments).

c. Fee USD 1,000 SLR 1,000

CONCLUSION

Thank you

…………….