Areas of Service

DIGITAL HEALTH

OUR INDUSTRY EXPERTISE

India is one of the fastest growing digital economies in the world. The Indian digital health market is estimated to reach USD 10.6 billion by 2025.[1] It is growing steadily at a CAGR of 24.7% during the 2019-2024 period.[2] Currently, the industry is dominated by telemedicine and e-pharmacies. However, it also comprises of businesses in the line of wearables, m-health applications, medical robotics, predictive analytics software, biotechnology and precision medicine. In recognition of the industry impact and growing momentum towards digitization of the healthcare system, the Government of India has been endorsing this niche market and creating a favorable investment ecosystem.

In mid-2020, the Government launched the Ayushman Bharat Digital Mission to establish a federated health information architecture to sustain the digital health network and support health-tech startups. This has significantly contributed to the surge in the digital health market and encouraged consumer adaption of digital health tools.

• Health-tech startups in the line of telemedicine, wellness platforms, diagnostics, analytics and EMR/EHR software are on the rise.
• Established pharmaceutical companies and healthcare providers are exploring entry-strategies into the digital health market with applications such as virtual medical assistants, smart medical devices, remote monitoring devices, nanotechnology etc.
• The industry is re-conceptualizing existing pharmaceutical products and therapies with integration of blockchain, AI, robotics and virtual reality.
• Industry players are looking at opportunities to utilize available health data efficiently for further uses such as clinical studies and academic research.

The digital health industry is an area of practice in which Nishith Desai Associates (“NDA” or the “Firm”) has built a significant expertise.  At NDA we endeavor to combine our rich international experience and expertise in domestic laws/regulations with our research capabilities to devise innovative structures and provide strategic advice to digital health companies to setup and pursue business activities in India.

SCOPE OF SERVICES

Strategic advice on Industry Law issues: The Firm advises on legal, strategic and compliance issues related to the laws governing the digital health industry. The Firm provides practical solutions, on the basis of the extensive domain knowledge of the industry including data privacy, medical device regulations, healthcare laws, liability etc.

Documentation: The Firm undertakes drafting and review of service agreements, data transfer agreements, privacy policies, terms of use and conditions,

Regulatory advice: The Firm provides advice with respect to regulatory issues which may arise due to licenses and permits; and business models and transactions undertaken by the digital health companies which may have implications under the applicable laws.

Litigation: The Firm has a robust Dispute Resolution Practice with members having skill and expertise to represent clients in different forums ranging from the NCLAT, CCI, High Courts to the Supreme Court of India.

REGULATORY AND LEGAL FRAMEWORK APPLICABLE TO THE INDUSTRY

Information Technology Act, 2000 (IT Act)

• Imposes a liability on such body corporate or person who deals with sensitive personal data or information for negligence in implementation and maintenance of reasonable security and procedures for securitization of such data, if such negligence causes wrongful gain or loss to any person
• Penalizes disclosure of personal information to a third person, if it is done without consent of the person to whom such information belongs or in breach of a lawful contract, and with the intention or knowledge that the disclosure may cause wrongful gain or wrongful loss
• Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 define sensitive personal data or information to include medical records and history and such personal information relating to physical, physiological and mental health condition

Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 (Data Protection Rules)

• Define personal information and sensitive personal data or information. Medical records and history, and such personal information relating to physical, physiological and mental health condition are deemed to be sensitive under the Rules.
• Impose several obligations on body corporate dealing with personal information and sensitive personal data or information
• Obligations arise at the time of collection, storing, using and transferring personal data. For example, a body corporate collecting sensitive personal data or information is expected to take the informed consent of the owner of the information. The body corporate is also required to publish a privacy policy on its website
• Violationof Data Privacy Rules may lead to penalty under IT Act

Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021

• Applicable to all health intermediary platforms
• Intermediaries are required to comply with requirements such as having a grievance redressal mechanism, displaying privacy policy and usage of personal data, removal of unethical and obscene information, monthly compliance report, implement reasonable security practices etc.

Consumer Protection Act, 2019

• Provides all-round protection of consumers and safeguards against commercial exploitation
• Scope of consumer rights and seller/manufacturer’s duties extended to e-commerce
• The Consumer Protection E-Commerce Rules, 2020 Imposes duties on marketplace and inventory entities

Drugs and Cosmetics Act, 1945 and Rules

• Regulates manufacturing, import, distribution and sale [confirm] of drugs (includes certain medical devices) and cosmetics
• Prescribes product and labelling standards
• Regulates advertisement of drugs
• Applicable to sale of drugs online

Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2002 (MCI Code)

• Regulates professional conduct of registered medical practitioners in India
• Violation of MCI Code may amount to professional misconduct resulting in penal action to the extent of permanent disqualification to practice, over and above any other civil or criminal action which may lie under relevant law

Telemedicine Practice Guidelines, 2020

• Appended to the MCI Code to enable registered medical practitioners to practice telemedicine in India
• Regulates the practice of telemedicine and provide guidance on the nature of care that may be given through telemedicine and the manner of providing such care
• Prohibits the prescription of certain categories of medicines

The Drugs & Magic Remedies (Objectionable Advertisements) Act, 1954

• Regulates all advertisements of drugs relating to diagnosis / cure / mitigation / treatment / prevention of certain prescribed diseases and conditions
• Diseases and conditions include AIDS, Asthma, Cancer etc.

CONCLUSION

With public health in the mind of the regulators and investors, the digital health industry is forecasted to experience immense growth. Given the intersectional nature of this industry, the digital health market presents immense opportunities for innovation and creativity to reinvent healthcare delivery and solutions with the application of emerging technologies. The COVID-19 pandemic has further intensified demand for digital health applications and remote healthcare delivery. However, since health is the primary focus of the industry, we anticipate that specific laws to govern digital health may be introduced and would strictly regulate the industry. Digital Health has gained a strong foothold in India over the past few years and we foresee a promising future for the industry.

REPRESENTATIVE CLIENTS

• Leading startups: Pharmeasy, Practo, Qure.Ai, Tricog, Mfine, Medibuddy, Curefit
• Leading MNCs: IBM, Siemens Healthcare, Medtronic, Philips Healthcare, Apollo, TATA Health