Price Cap Reforms in Medical Devices
Earlier this year the National Pharmaceutical Pricing Authority (NPPA) capped prices of stents to end exploitative pricing and vulgar profiteering. Data collected by NPPA showed that cardiovascular stents were being sold by hospitals at extremely high markups.
It is ironic that whereas on one side the whole world is applauding Government of India’s (GoI) huge step of price cap toward making essential medical products available across the country at affordable prices, on the other side three US MNCs namely Abbott, Boston, and Medtronic are trying to arm-twist the Indian government to reverse its decision on price cap of medical devices in India and creating fault lines between relations between India and US.
The first bogey raised by these importer MNCs was that their products demanded differential higher pricing when it was being decided that stents are an essential medicine and price capping was inevitable. However, they were unable to demonstrate superiority and clinical benefits to patients between their own brands and other equivalent Indian brands to the NLEM committee appointed by MoHFW.
Post price caps the importers protested against the unreasonably low-price caps and claimed that this action would be harmful to patients as this move would deny access to innovative medical devices, hurt manufacturing in India, and discourage FDI in the medical devices sector. This was blatant misinformation as NPPA and IMA had clearly spelled out that differential pricing for a new range of stents could be considered in future subject to claims of superior technology to be backed by clinical data. The bogey went bust when Abbott Vascular was asked by USFDA, EU Regulators, TGA-Government of Australia, and also by Drugs Controller General of India to withdraw its Absorb Bioabsorbable Stent on charges of public safety concerns, since the Absorb proved to carry higher side effects for the patients in terms of stent thrombosis globally.
The price cap has resulted in simultaneously boosting domestic medical devices manufacturing, increasing the market size due to higher affordable access.
When they realized the GoI was being firm and relentless it is shocking to see how US MNC’s are lobbying with the USTR for using threat of access to the US market by Indian exporters to suspend or withdraw Indian exporters import duty benefits under Generalized System of Preference (GSP) to arm twist the Indian government in creating differential pricing for USFDA approved stents. The facts are that it is the Indian medical device manufacturers who face discrimination in India and in US. Every country encourages indigenous products as they would contribute to low dependence on the imported products but the Indian stent manufacturers were challenged in our own country. There were many government tenders where the Indian companies could not participate as the same had unfair specifications demanding a USFDA approved product.
USFDA has increased registration charges by 33 percent to 126 percent w.e.f. 2018. This makes it very expensive for Indian manufacturers/exporters to register for US as applicable fees for 510K registration is USD 10566 for each product compared to USD 4690 each in 2017 and premarket approval for high risk device is at USD 310,764 up from USD 234,495. So a manufacturer would need to be exporting and selling at least 50–100 times that value to justify absorbing such high costs.
The big question is should India bow to such threats to access of US market by a group of three US MNCs lobby when US is itself suffering from highest healthcare costs in world and three times that of the United Kingdom?
- We call on the GoI to uphold the constitutional obligation on right to health and reject any pressure to review reasonable price controls on medical devices
- We ask that reasonable price controls are urgently expanded to cover 19 additional categories of medical devices classified as drugs
- We request the US government to investigate the unethical trade practices that US medical device companies indulge in India, which gives a bad name to US
- We request the Indian government and CCI to expedite their investigation on reported anticompetitive practices in healthcare
If they have to sell in India they have to respect Indian laws and regulations as we do when we sell to EU/US and other countries.
