Cost cut: New cap for medical device rates

Hyderabad: The Centre is considering rationalising trade margins for medical devices as capping their prices has not proved to be beneficial to patients at the hospital level. The trade margin rationalisation (TMR) of medical devices, which is being initiated at the landed cost, will have an impact on the $16 billion medical devices market, according to sources.

The Centre is calling for suggestions on the TMR and is checking the landed cost of imported medical devices. Mr Ritesh K. Singh, a public health expert, explained, “Margin controls have to be based on the price to trade and not on landed cost basis. Landed cost does not consider other expenses like training of clinicians, providing technical support, skill development and other miscellaneous expenses.”

The industry is of the view that if margin controls are not implemented from the first point of sale, the export of Indian medical devices will dip drastically as the Indian exim policy is closely monitored by other South Asian nations. They warn that patient safety will be compromised and the latest technology will not be available in India. The industry states that the trade margin proposal is estimated to reduce the price by 73 per cent.

While affordability will increase, access to quality healthcare and innovation is being debated. Any changes to the prices in India have an impact in  Pakistan, Bangladesh and Sri Lanka. According to sources in the medical device industry, the capping of stent prices by 80 per cent led to capping of stent prices in these three countries also. This is affecting the export of stents from India to these countries.