Abandoning the current price control mechanism, India is set to cap trade margins on medical devices, to curb profiteering as well as to address concerns of device makers, particularly importers of stents and knee implants, who have complained that price caps hurt innovation and limit choices for Indian patients. It will soon announce its decision on a method of rationalizing trade margins for medical devices from the first point of sale.
According to the government think tank NITI Aayog’s formula, the maximum retail price of a device will be decided by adding the trade margin to the price at the first point of sale. The trade margin is the difference between the price at which the manufacturers/importers sell to stockists and the price charged to consumers. “Many expenditures are incurred by the importing companies, including clinical education on deployment, and therefore trade margins should start from the first point of sale, that is the stockist,” notes NITI Aayog. Global research-based companies need to invest and support clinicians in education and skill building. Every year, around 2.3 million healthcare professionals are trained by these companies.
Currently, 23 medical devices have been notified as drugs and are regulated under the Drugs and Cosmetics Act. Of these, only four—cardiac stents, drug-eluting stents, condoms and intra-uterine devices—are included in the National List of Essential Medicines and are subject to notified price caps. Last year, knee implants were brought under price control under paragraph 19 of the Drugs (Price Control) Order, 2013. The remaining medical devices are not under any form of price regulation.
