India moving closer to implementing price controls on medical devices

Sources told the Hindustan Times that the government intends to issue a medical price control order under the Essential Commodities Act, which could cut the prices of stents in half, among other devices.  “We are examining whether the Central Government Health Scheme prices can be made applicable across India to bring down costs,” a senior health ministry official told the Hindustan Times.

Device prices under the government scheme are 40% to 70% lower than those paid on the open market, the Hindustan Times said.  The official also said the government was still consulting with industry.  “There is a reasonable market in India for devices manufactured here and it’s not a bad thing to regulate prices,” said Dr. Ashok Seth, chairman of Fortis Escorts Heart Institute in the article.  “However, it shouldn’t be low-cost, poor-quality stuff to fit into the price bracket.”

In June, the government released a draft medical device policy that listed a plethora of steps to be taken, such as the creation of a skill development committee to strengthen the country’s med tech workforce, and called for a National Medical Device Authority to promote its nascent med tech sector through such industry-friendly measures as the creation of industrial parks, tax concessions and direct government funding of startups.

Critics say the price controls will deter investment in the country’s med tech sector and undo the other industry-friendly measures that are planned.  Foreign players should also worry about moves to favor the country’s underdeveloped domestic med tech companies, such as preferential procurement of locally made devices.  The prices of 343 pharmaceutical medicines are already controlled under the Essential Commodities Act, but the country is a large exporter of drugs and has many domestic manufacturers of generics.  The series of reforms planned in the med tech space aim to give India a similar status in the medical device arena.

REFERENCE:  Fierce Medical Devices; 13 JUL 2015; Varun Saxena

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