As Dr Harsh Vardhan began his second term as minister of health and family welfare, he reiterated his ministry’s commitment to providing Health for All. The cumulative target set for 2019-20 is to transform 40,000 sub-health centers and primary health centers into Ayushman Bharat-health and wellness centers (AB-HWCs) and 150,000 by 2022. Currently, there are 19,000 operational AB-HWCs.
While the government goes ahead with its plan to regulate all medical devices – currently it regulates 24, under India’s Drugs and Cosmetics Act, as recommended by DTAB – the industry maintains that the roadmap would be incomplete if the government does not address patient safety under a separate medical-devices law and revamp CDSCO to include a separate division for medical devices.
The National Medical Devices Promotion Council, which has yet to hold its first meeting, has its task cut out for resolving the issue of AiMeD’s recommendation of higher import duties, preferential market access, and capping of trade margins to help local companies against MTaI’s contention that Indian basic customs duty rate on medical devices at 7.5 percent is too high in the Asia-Pacific milieu and should be revised downward, given the 10-percent cap on the possibility of increasing MRPs in a year. Also, that the GST Council should reduce GST rate on medical devices from 12 percent to 5 percent besides notifying hospital services under zero GST rate. The drop in FDI in the medical and surgical appliances sector from USD 439 million in 2016 to USD 66 million in 2018 is certainly a cause of concern as is the increase in imports in medical devices from Rs 28,067 crore in 2016-17 to Rs 38,837 crore in 2018-19.
After more than two years of subdued performance, the Indian hospital sector seems to be coming out of the red. In the financial year 2018-19, revenues of the companies in ICRA’s sample set grew 10 percent to Rs 15,891 crore compared to revenues of Rs 14,475 crore in the previous fiscal. The sample set comprised of Apollo Hospitals Enterprise, Fortis Healthcare, Narayana Hrudalaya, Healthcare Global Enterprises, Max India, and Shalby. However, the main culprit, the regulatory environment, continues to be the overarching challenge!