Legal Support for Healthcare, HealthTech and Medical Services Companies in India
The Healthcare, HealthTech and Medical Services industry is a constantly evolving industry bringing new innovations to promote efficiency and efficacy. The industry plays a vital role in the life of each and every individual by protecting that which is most important, i.e., the life and well-being of an individual. While the nature of the industry allows exponential growth, it also faces significant challenges due to the numerous statutory requirements.
With the industry providing both goods and services, the legal documents and statutory compliances must take into account all the areas and core functions of the organisation and must be drafted on a case-by-case basis. The key compliance requirements arise not only from the sector-specific regulations such as the Drugs and Cosmetics Act, 1940 and the Biomedical Waste Management Rules, 2016, but also from the general statutory provisions.
Corrida Legal not only assists in the setting up of an entity but also assists with the ongoing operational requirements. We not only ensure that each document which is entered into between the business and its vendors is legally compliant but also ensure that each medicine is compliant with the applicable laws. This includes ensuring that the medicine clears all regulatory requirements by providing services of filing of applications, meeting labelling requirements and addressing other key concerns.
Healthcare Product Claims, Prescriptions and Patient-Facing Disclaimers
A health-related product should not be described only through promotional language but must promote transparency as in our experience this approach not only protects the entity from legal risk but also creates brand value. The product page and supporting material should identify the relevant ingredients, cautionary information and the circumstances in which a user should obtain professional advice. We promote such an approach to ensure that the organisation is protected against any potential litigation due to the content of the product and to reduce operational disruptions.
Where the use of a product is connected with a prescription or medical supervision, the process should also deal with the receipt and validation of the prescription. The website disclaimer cannot correct a process under which a restricted product is supplied without the document required by the business itself. We assist organisations with not only structuring the website to ensure legal compliance with respect to prescription medication but also preparing terms of use for the website to better suit the healthcare industry.
The customer-facing documents and advertisement may need to state that:
- the user should review the ingredients and cautionary information before use;
- the product should not be used where the user is aware of a possible allergy or adverse reaction;
- information displayed on the website or application is provided for information and education;
- website content is not intended to enable self-diagnosis or replace professional advice;
- prescription-based products will be supplied only after the required prescription is provided; and
- the user remains responsible for providing a genuine and valid document.
The disclaimer should be written for the particular product and delivery model. A general statement that the company accepts no liability will not resolve a contradiction between the disclaimer, the product page and the process followed at the point of sale. In our previous experience, we believe that implementing the necessary disclaimer for each product ensures that the consumer is duly informed and protects the organisation from potential disputes.
HealthTech App Development and Software Agreements
The application-development agreement should describe what is being built before it allocates ownership or liability. We have witnessed that defining the scope of the product being built at the initial stage allows the agreement to carefully cater to all the aspects of the legal requirements and best industry practices.
The specifications may be recorded in a schedule. Deliverables and corresponding milestones can then be linked with documentation, source code, testing and payment. The defining of milestones in a software agreement is vital as it allows the payment to be tied to the performance of the agreement. In our experience, this ensures that the service standards remain constant throughout the engagement.
The contract should also deal with changes requested after development begins. A change in the specifications may affect the delivery schedule, technical work and project fee, and should therefore be accepted or rejected through a written change-request process. In our experience, during the course of development of an application, the scope of the application may change due to business expansion, regulatory developments or general development in the industry. The approach of specifically incorporating the abovementioned provisions allows a degree of certainty to the business that it has with respect to the development of the software.
Testing provisions should state:
- the testing period;
- the operating environment and testing parameters;
- the manner in which a non-conformity will be identified;
- the developer’s responsibility to rectify it;
- the effect of rectification on the testing period; and
- the point at which the application will be treated as accepted.
Intellectual-property provisions require a separation between work created specifically for the client, technology already owned by the developer and third-party material incorporated into the application. The agreement should state whether each category is assigned, licensed or retained by its existing owner. This ensures clarity to owners and investors with respect to the protection available to them.
This distinction is important for a HealthTech product which may combine a newly developed interface with an existing platform, database, algorithm, diagnostic tool or licensed component.
Patient, User and Employee Health Data Privacy
A healthcare or HealthTech privacy notice should be based on the information actually collected through the website, application, account-registration process, payment journey, consultation process and customer-support function.
The notice may need to cover:
- information provided when a user creates an account or contacts the business;
- payment, billing, shipping and transaction information;
- information generated through use of the website or application;
- device, browser, diagnostic and approximate-location information;
- health information, prescriptions or other documents supplied by the user;
- communications, complaints and customer-support records;
- rights available to the customer with respect to their personal information; and
- information shared with service providers involved in delivery of the service.
The document should explain why each category is being processed and with whom it may be shared. Hosting providers, payment-related service providers, customer-support vendors, analytics providers and other processors should not be given unrestricted use of the information merely because they support the business. The personal information must be shared with other organisations on an as-and-when-required basis whilst ensuring that such organisations have sufficient security measures implemented to protect the personal information.
The internal privacy framework should also address access, accuracy, security, retention, deletion, requests made by the individual and the response to a suspected breach.
Employee health information requires separate treatment. Sickness records, medical notes, absence information and documents supplied in connection with an employee’s health should be accessed and used only for the identified employment purpose. To ensure compliance with the applicable data protection laws, we encourage our clients to implement a privacy-by-design structure. This ensures the least risk from statutory non-compliance, protecting the organisation from operational and financial risks.
Healthcare Vendor and Service Provider Agreements
A healthcare business may depend on software providers, laboratories, logistics vendors, payment providers, consultants, customer-support teams, marketing vendors and other service providers.
A master vendor agreement can set out the terms applying to the wider relationship, while individual services are described through separate service-level agreements. Each service-level agreement should record the work, schedule, fee and operational requirements for that service.
The vendor documents should address:
- licences and registrations required for the service;
- personnel qualifications and replacement;
- compliance with the company’s safety and security policies;
- restrictions on making representations on behalf of the company;
- conflicts of interest;
- confidentiality and ownership;
- processing of personal data;
- service levels and reporting;
- changes to the agreed scope;
- termination and handover; and
- responsibility for the vendor’s employees and subcontractors.
Where the vendor processes user or patient information, the agreement should limit processing to the agreed purpose. The information should remain relevant to that purpose, be kept accurate where required and not be retained in an identifiable form for longer than the service requires. We ensure that the processing remains compliant with the applicable laws by not only implementing relevant provisions in the agreement to safeguard the healthcare business, but also assisting our clients in determining the relevant information which is required to be shared with such vendors.
Health and Wellness Product Listings, Quality Warranties and Consumer Complaints
A business selling health, nutrition, wellness or personal-care products should connect the product listing with the contractual responsibilities of the seller or supplier.
The seller should be responsible for the accuracy of the product description, ingredients, features, purpose, country of origin, images and quality information supplied for publication. Claims such as “natural”, “organic” or “sustainable” should not be used without the seller accepting responsibility for their accuracy.
The agreement should also address authenticity, product standards, side effects, warranties, returns, replacement, refund responsibility and compliance with the requirements applicable to the product. This is ensured by us, by implementing contractual obligations which bind the seller to comply with the industry standard and protect the brand’s reputation.
Customer complaints should be reviewed against the complete purchase journey. This includes the product page, advertisements, disclosures made at checkout, the return or exchange policy and the response already issued by the business team. Each of these must be drafted in a manner which promotes transparency and reduces instances of financial risk to the business.
A customer-facing “no refund” condition should not be treated as the end of the review where the complaint alleges that the product did not match the characteristics, quality or expectations created by its online description. In our previous experience, we have assisted organisations in navigating the sources of such complaints and address the same by preparing seller communications as well as providing corrective actions.
Employment Contracts and Workplace Policies for Healthcare Businesses
Healthcare and medical services businesses may engage employees, consultants, professionals, trainees, outsourced personnel and agency workers. The document should match the relationship being followed in practice.
Employment and consultancy documents may cover duties, reporting, place of work, working hours, confidentiality, ownership of work, access to sensitive information, company property, notice and handover.
The handbook and supporting policies may address workplace conduct, attendance, leave, health and safety, information security, grievance handling, maternity benefits, equal opportunity and disciplinary action. We ensure that the employee handbook is prepared in a manner which specifically assists the healthcare industry. For one of our clients, we specifically implemented policies which include a Medical Professional Conduct Policy and a Sterilisation and Disinfection Policy to ensure that the best industry practices are followed and to minimise concerns arising out of professional misconduct.
An equal opportunity policy can extend to recruitment, training, working conditions, pay, transfers, benefits and career growth. It should also provide a process through which disability-related requirements and reasonable workplace support can be considered.
Maternity documentation should address eligibility, leave and benefits, together with the records required for administration of the leave. The company should not circulate medical information more widely than is necessary for the employment process.
Healthcare employers also require a POSH framework where applicable, including the policy, Internal Committee documentation, notices, training, annual reporting and inquiry support. We ensure that, whilst preparing the handbook for our client, we are compliant with not only the employment law requirements but also the sector-specific requirements.
AI Use, Confidentiality and Medical Information
Medical records, health conditions, biometric information and other confidential patient or employee information should not be uploaded into an open AI tool merely because the tool is being used for a work-related task. We have faced numerous instances wherein our client faces concerns due to information being shared on AI tools. To negate this, we have actively suggested and implemented an AI usage policy to provide permitted AI tools whilst providing a list of restricted uses of AI tools.
An internal AI policy should require staff to verify AI-generated material and should make clear that an AI output is not a substitute for professional judgment.
The policy may also prohibit employees from:
- uploading confidential or sensitive information without approval;
- using unapproved AI tools on company systems;
- treating an AI response as the primary source for a work decision;
- using output which may infringe third-party rights;
- concealing the use of AI; or
- relying on material which has not been reviewed for accuracy and appropriateness.
For a healthcare business, this control is relevant not only to privacy. Incorrect or unverified material may enter patient communications, product descriptions, internal assessments or professional-facing documents. Thus, our approach to the preparation of an AI Usage Policy is to provide a list of use cases which typically include uses such as preliminary research and any automated processes such as basic calculations or grammar checks. We further encourage through this policy that any document generated by AI tools must only be used as a first draft by medical professionals and is not to be submitted to patients.
Ongoing Legal Retainer Support for Healthcare and HealthTech Companies
Legal requirements in a healthcare business commonly arise through different teams. The product team may require a disclaimer, the technology team a development agreement, HR an employee communication, operations a vendor contract and management a response to a customer complaint.
An ongoing legal retainer can cover commercial agreements, employment documentation, POSH, privacy, website documentation, negotiations, consumer issues and pre-dispute communications.
The value of continuity is that a new document can be reviewed against the business’s existing product descriptions, platform terms, data practices, contracts and workplace documents rather than as an isolated request. Our approach is unique in that we aim to provide not only legal advice to our clients but also operational and business advice to the best of our ability. We recently assisted one of our retainers in streamlining the acquisition process in the healthcare sector by reducing operational requirements in their agreement with the vendor.
Conclusion
The healthcare industry is an essential industry aimed at protecting our wellbeing. Whilst the industry is booming, the businesses must be wary of the concerns which steam from statutory requirements. The healthcare industry in India is a highly regulated industry and as such must comply with a slew of regulatory requirements which arise from sector regulators of healthcare, labour and employment, company law, data protection, intellectual property and consumer protection.
We at Corrida Legal are here to assist businesses not only during the initial stages of their business but throughout their business lifecycle. Our aim is to ensure that each and every action undertaken by the entity is legally compliant and operational feasible. We not only provide comprehensive services pertaining to drafting agreements and ensuring statutory compliance but also review every communication to ensure risk mitigation.
Frequently Asked Questions
What documents may a HealthTech platform require?
The set may include platform terms, a privacy and cookie policy, product or service disclaimers, application-development agreements, vendor contracts, professional or consultant agreements and employment documents. From our years of experience, we understand that for every document executed by a business in the HealthTech sector, the entity must ensure the protection of patients’ personal data and focus on sector-specific regulations.
Can a healthcare website state that its content is not medical advice?
Yes, where that statement reflects the role of the website. The disclaimer should not be used to disguise a service which is actually being presented as diagnosis, treatment or professional advice.
What should be included in a healthcare product disclaimer?
The disclaimer may address ingredients, allergies, cautionary information, professional advice, prescription requirements and the limited purpose of information displayed through the website or application. We ensure that the disclaimer protects the entity legally by ensuring that the disclaimer is legally compliant and does not misrepresent any crucial information.
How should prescriptions uploaded by users be handled?
The business should define the prescription requirement, validation process, permitted access and retention position before allowing a prescription-linked product or service to proceed. In one of our previous engagements, we specifically prepared documentation for the business to ensure that operationally if a customer acquires medicine without a prescription or by forgery of a prescription, the business will not be liable to the customer.
What should a HealthTech software agreement cover?
It should address specifications, milestones, delivery, testing, change requests, acceptance, intellectual property, confidentiality, fees, termination and dispute resolution. It should also contain specific provisions pertaining to compliance with statutory requirement, patients’ data protection, and data transfer. In our previous engagements, we have assisted both the HealthTech company and the software developer navigating these provisions to ensure the least hinderance in the implementation of the software.
Who owns software developed for a healthcare company?
The agreement should distinguish work created for the client from the developer’s existing technology and third-party material, and state the assignment or licence applicable to each category. We actively assist our clients with the audit of IPR, the preparation of relevant assignment deed and the registration of IPR.
What data should a healthcare privacy notice cover?
It should reflect the information actually collected, including account, payment, transaction, device, communication and health-related information, together with its use, sharing, retention and security. We have assisted numerous clients in implementing a privacy-by-design framework which enables the entity to have a better structure with respect to the processing of data and the ease of implementation of privacy notice.
What should be included in a healthcare vendor agreement?
The agreement may cover the services, licences, personnel, service levels, confidentiality, data processing, safety, fees, reporting, changes, termination and handover.
How should a complaint about a health or wellness product be reviewed?
The review should cover the complaint, product description, advertising, purchase journey, applicable customer-facing policies and the response already issued by the business.
When is an ongoing legal retainer useful for a healthcare company?
It is useful where product, technology, privacy, employment, vendor and customer matters require legal input across different teams. Our approach ensures that we are your one-stop shop for all legal requirements, allowing entities to focus on what is important, which are business operations. We provide comprehensive services which encapsulate everything from healthcare-specific regulations to data protection.
