Economists can just turn the table, don’t they? When reports about Healthcare sector expecting to touch $158.2 billion by 2017 came up, entrepreneurs that always wanted to do something big in this sector felt unstoppable. Yes, you got the point! This blog is for all you fans that has been requesting me to write on the e-healthcare sector. So, let’s get on with the basics of starting healthcare business in India.
- Business Registration:
This is a must for startups in this sector and probably the first step for starting healthcare business in India. Since there are multiple players involved, raising funds is another major thing to be concerned about, therefore registering it as a PVT. LTD. Company makes sense for most entrepreneurs.
- Rules under the IT Act:
- Data Protection: The patient must be informed that the data is being collected, purpose behind the same and whether it would be transferred to any third parties, along with the contact details of the agency collecting the information.
- Follow the international standard IS/ISO/IEC 27001 on Information Technology
- Appoint a ‘Grievance Officer’, whose contact details are to be published on the website.
- Not to miss OSP Regulations:
If you are planning on starting healthcare business in India that will have Application based Services which includes telemedicine services, you will be required to be registered as an ‘Other Service Provider’ (OSP) with the Department of Telecommunications.
- Abide by the rules of The Drugs and Cosmetics Act (this one is for e-pharmacies)
- All drugs must be sold under a license. The Rules under this act clearly lay down which drugs can be sold only on the production of a prescription issued by a registered doctor.
- Drugs which can be sold only on prescription are stated in Schedules H, H1, and X.
- The Drugs and Magic Remedies Act, 1954:
If you are going to send Advertisements (promoting anything) to registered medical practitioners and chemists after starting healthcare business in India, you can do only if your documents bear the words ‘For the use only of registered medical practitioners or a hospital or a laboratory’ at the top of the document.
- Unsolicited Commercial Communications Regulations, 2007 and Telecom Commercial Communication Customer Preference Regulations, 2010:
Sending unsolicited commercial communications over voice or SMS are prohibited. However, there is no legal bar over sending transaction messages after starting healthcare business in India.
- The Clinical Establishments Act, 2010 (this one is for startups that have clinics as well): Registration with the relevant authority and conform to the minimum standards as prescribed under the act.
- A computer program ‘per se’ is excluded from patentability under Section 3(k) of the Patent Act, 1970., provided it meets the other requirements of CRI.
- Patents for software programs have been issued in the past where it involves a hardware component as well. If the technology/software fulfils these requirements, you could file for a patent and receive protection if the same is granted.
- Software can be protected as a literary work under copyright law.
- The idea would have to be expressed in some form of medium before it can be protected.
- Clinical guidelines and data could be protected under the Copyright Act, only if it is expressed in some form of medium.
Design protection would be the Graphical User Interface (GUI) of applications and the design of the devices and this can be protected under the Designs Act.
The ‘mark ‘ an e-Health application or device could be registered as a trade mark under the Trademark Act.
- Trade secrets: You can protect the trade secret by signing a Non-Disclosure Agreements with employees to avoid information going out of your roof.
- Indirect Taxes:
- Service tax is 14% payable by the service provider.
- Value Added Tax (VAT) is levied on the sale of goods within a state and rates vary widely anywhere from 0%-1% to 4%-12.5%.
- Central Sales Tax is imposed on the sale of goods during interstate trade or commerce.
- Corporate Tax
- Indian residents are taxed on their worldwide income
- Non-residents are only taxed on income arising from sources in India.
- Follow the standards of NeHa:
NeHA is a promotional, regulatory and standards setting organization to guide and support India’s journey in e-Health.
- Terms of service:
You are required to have the Terms of services document in place, that has all the required information about services like Age verification and other rules.
- Payment Gateway Compliance:
It is mandatory for every ecommerce startup, on a similar line e-healthcare startups should consider doing the same.
- Abiding International jurisdiction:
Every country has its own set of compliance that businesses outside the country should follow.
- Cofounders Agreement:
Importance of having this conversation (or more likely, conversations) early on, explain why a founders? agreement is a valuable tool to maintain a healthy co-founder relationship. It is like defining your marriage with the fellow co-founder.
- License Agreement:
Licensing agreements cover a wide range of well-known situations. For example, a retailer might reach agreement with a professional sports team to develop, produce, and sell merchandise bearing the sports team’s logo. On a similar note, when you provide license to doctors to use your app, it is important that you have a license agreement to support the same.
- Contracts and Agreements:
To protect your relationship with partners or doctors on a long run. The doctors should be able to present the necessary credentials and certification and all these action items included in the contract or agreement would assure quality.
Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.
For any Legal and Accounting support, Happy to help you, let us talk at Wazzeer.