What is Loan License for a Medical Device?

A loan license is issued by the State Licensing Authority (SLA)/Central Licensing Authority (CLA) for manufacturing medical devices; it is an agreement between two manufacturers who grant the right to use their facilities and infrastructure for manufacturing the device. A company that wants to manufacture and market its medical device in India but does not have the necessary manufacturing capabilities for production should meet the Regulatory standards laid out by the Central Drugs Standard Control Organization (CDSCO).

Why Do Manufacturers Opt for the Loan License Pathway?

• It can help manufacturers get around Regulatory obstacles and thereby significantly lower the investment required to enter the Indian market.
• It is helpful when manufacturers lack sufficient production units.

Who Can Benefit from the Loan License?

• Startups
• Foreign companies.
• Indian companies.
• Manufacturers who hold the manufacturing license but do not have the necessary sterilization facilities.

Requirements for Obtaining a Loan License

You must fulfil the following criteria prior to applying for the approval of a loan license:

• The manufacturing site must adhere to the local Quality Management System (QMS) requirements for medical devices.
• You need to appoint qualified technical personnel to oversee and direct the manufacturing process.
• You need to appoint qualified technical personnel with a minimum of two (02) years of expertise in medical device testing; their guidance and supervision of the testing activities are of prime importance in the manufacturing process.

What are the Details Included in a Loan License?

• Facilities and Infrastructure: The Indian manufacturer (the licensor) provides the foreign company (the licensee) with the necessary facilities and infrastructure for manufacturing the medical device.
• Technology Transfer: The Indian manufacturer provides the foreign company with the necessary technical know-how and expertise for the manufacturing process.
• Regulatory Compliance: The foreign company is responsible for obtaining the necessary Regulatory approvals from the CDSCO to manufacture and market the medical device in India.
• Quality Control: The foreign company is responsible for ensuring that the medical device meets all the necessary quality and safety standards.
• Compensation: The foreign company pays a fee to the Indian manufacturer for the use of the latter’s facilities and infrastructure.

Loan License Authorization for Manufacturing Class A and B Medical Devices

Low- and moderate-risk device manufacturers, who intend to obtain loan licenses for manufacturing Class A and B medical devices, are required to file their applications to the SLA. The manufacturer must do this via an online portal through Form MD-4 and pay a processing fee for the grant of the license for the manufacturing/sale/distribution of Class A or Class B medical devices; they will receive the approval of their application through Form MD-6.

Loan License Authorization for Manufacturing Class C and D Medical Devices

High-risk device manufacturers who intend to obtain licenses for manufacturing Class C and D medical devices are required to file an application to the CLA. The manufacturer must do this via an online portal through form MD-8 and pay a processing fee for the grant of the license; they will receive approval of their application through Form MD-10. Medical device officers must inspect the production facility within sixty (60) days from the date of submitting the application before granting a license for the manufacture of Class C or D medical devices.

Loan License Validity

The validity of loan licenses issued for Class A, B, C, and D medical devices remains indefinite, provided you pay the license maintenance fee before the five (05)-year period from the date of issue expires, unless it is suspended or canceled by the SLA/CLA.

Conclusion

To conclude, manufacturers who wish to obtain loan licenses from the SLA and CLA must comply with the Regulatory requirements established by the CDSCO. They are expected to always keep detailed documents while requesting for a loan license. Due to the strict Regulatory framework established by the CDSCO, manufacturers might find it difficult to obtain loan license certification for their medical devices.

An experienced Regulatory partner can help you come up with an appropriate strategy for obtaining loan license certificates. Are you looking for a Regulatory expert to assist you in getting your loan license certificate?  Reach out to us. Stay informed! Stay compliant!