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AiMeD slams suggestion to increase MRP of medical devices, says importers' lobby tries to mislead govt
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Our Bureau, New Delhi
November 24 , 2018
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Reacting to a press statement by the importers lobby asking one-time increase of up to 18 per cent in maximum retail prices (MRPs) of medical devices, including stents and orthopaedic knee implants, Rajiv Nath, forum coordinator of Association of Indian Medical Device Industry (AiMeD) said that it is shocking to see how importers lobby on one side states that trade margins are excessive and need to be rationalised and capped and at the same time they wish MRP on medical devices to be increased by 18 per cent for all devices.
Nath lashed out at the importers lobby for misleading the government against its mission of making healthcare affordable in India. If trade margins are not rationalised including the importers margin the consumers will suffer and if MRP is increased then also the consumers will suffer as the MRP is already excessively high. “Importers lobby is least concerned about making healthcare affordable for Indian consumers and Indian medical device industry but thinks only for protecting their own profits,” added Nath.
As govt doesn’t control import price or importers price to hospitals, so what’s stopping the importers to increase that to compensate themselves for cost increase? The reason behind it is the competition from domestic manufacturers whose prices are not up which importers wish to counter by keeping retailers and traders satisfied with higher remunerative MRP and trade margins.
According to the recent estimates of the National Pharmaceutical Pricing Authority (NPPA), patients across the country have saved around Rs. 15,000 crore under the government’s initiative of ensuring affordable, quality medicines for all.
Much more can be saved by patients if Niti Aayog and PMO act on AIMED’s recommendations on price controls. The question parliamentarians should be asking the government is what’s the opportunity cost of higher costs borne by patients for not acting on AIMED’s recommendations to cap trade margins to 75 per cent over the import landed price and Indian manufacturers ex-factory price.
Indian manufacturers seek preferential market access by preferential pricing as is permissible under the WTO, reasonable tariff protection, price controls and strong deterrents like punishment to errant companies engaged in unethical marketing practices to boost domestic manufacturing.
Price controls can be done in a calibrated manner through 1 per cent GST cess on MRP as a tax-based disincentive, capping trade markups to a rational level and price caps on a few priority devices.
Make in India of medical devices is already suffering and following MTAI-recommended formula will make Indian manufacturing at a further competitive disadvantage. The government needs to take policy decisions to give strategic advantage to domestic companies while safeguarding consumers or India will remain 70-90 per cent import dependent.
“We welcome the induction of the new NPPA Chairwoman Shubhra Singh. We hope she will have the freedom to provide leadership to the NPPA as done by Bhupendra Singh and usher in reforms and much needed amendments to DPCO as currently it doesn’t address huge price disparity among similar medical devices and in fact increases it year over year,” Nath said in a statement.
"There is an urgent need for an integrated and calibrated development policy to put ‘Make In India’ initiative in medical devices sector in top gear and reduce high import dependency on foreign made devices in order to promote indigenous manufacturing of drugs and devices which would go a long way in making healthcare affordable." he added.
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