The medical device industry is calling on the NPPA to streamline trade margins for imported medical devices and domestic medical devices

The domestic medical device industry has asked the National Pharmaceutical Pricing Authority (NPPA) to streamline trading margins from the first point of sale (POS), i.e. when GST is initially calculated based on ex-factory discounts in the case of the imported medical device industry and for domestic manufacturers, based on ex-factory prices .

This illustration comes after the NPPA recently capped prices on pulse oximeters, blood pressure monitors, nebulizers, digital thermometers and blood glucose meters due to increasing demand due to a pandemic in a Gazette release dated July 13, 2021.

“For many medical devices it has been found that the trade margins are 10-20 times higher than the import prices. Our goal was to limit the Maximum Retail Price (MRP) to 2 to 4 times the imported landed price which is the first POS rather than the Merchant Price (PTD) which can be the second POS if the Government wants to protect consumers while trying to stop the soaring import bill, which exceeded 45,000 crore last year, ”said Rajiv Nath, forum coordinator for the Association of Indian Manufacturers of Medical Devices (AiMeD).

NPPA has collected data on the trade margins for these five medical devices from manufacturers, marketers, and importers and found that margins of up to 709% from PTD to MRP levels have been reported.

Industry has questioned that NPPA did not share the study result of the trade margin based on the landed price of imports with industry stakeholders. When this data is available, there is more transparency.

In addition, a medical device manufacturer says: “The dominant importer lobby, which controls 85% of the market, will welcome this announcement, while the struggling Make in India lobby will be desolate and once again suffer a competitive disadvantage. It appears that the government has misconceptions about protecting consumers while discouraging domestic production and opposing the prime minister’s vision of an Atmanirbhar Bharat. India will continue to be dependent on medical devices with such superficial policies that appear to be consumer-friendly, but in the long term could deny access to home-made medical technologies. “

The NPPA has awarded the price of five medical devices, namely pulse oximeter, blood pressure monitor, nebulizer, digital thermometer and glucometer under the Trade Margin Rationalization Approach (TMR) citing the provisions of Section 19 of the Drugs Prize Control Order (DPCO) – 2013. capped.

The move aims to make these medical devices affordable through price control according to a prescribed formula in the face of increasing demand due to the pandemic.

The formula required for the Maximum Retail Price (MRP) is Price to Distributor (PTD) + (PTD x TM) + Applicable GST, where TM = Trading Margin not exceeding 70%.

It has also directed manufacturers to set the MRP and provide the information detailing the PTD, retail price, existing and revised MRP using the formula prescribed by the NPPA by July 20, 2021.

The changed prices come into effect on July 20, 2021. The price determined in this way remains valid until January 31, 2022 or until further orders, whichever is earlier. The state drug controls ensure compliance with this ordinance.

Manufacturers who do not comply with the MRP calculated and specified in this way are obliged to deposit the excess amount together with 15% interest per year (PA) from the date of the price increase plus a contractual penalty of up to 100% of the excess amount according to the provisions of the DPCO -2013, read with the Essential Commodities (EC) Act, 1955.

No manufacturer, distributor or retailer may sell these five medical devices to consumers at a price greater than the revised price presented on Form V or the price shown on the container label or packaging, whichever is lower.

Pursuant to Section 25 (3) DPCO 2013, every retailer, dealer, hospital and every facility has to lay out the price list and the additional price list as provided by the manufacturer in a clearly visible place on the business premises in such a way that it is easily accessible to every person who uses them want to see.