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Earlier this year the NPPA (National Pharmaceutical Pricing Authority) 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 (for example, 436 percent for bare metal stents and 654 percent in the case of drug eluting stents, on average).
It is ironic that whereas on one side the whole world is applauding government’s huge step of price cap towards 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 India and US relations.
The first bogey raised by these importer MNCs was 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 Ministry of Health and Family Welfare.
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 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, one of the US manufacturers who was asked by USFDA (US Food and Drug Administration), EU Regulators, TGA-Government of Australia and also by Drugs Controller General of India to withdraw their 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 realised India was being firm and relentless it is shocking to see how US MNCs 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 generalised system of preference (GSP) to arm twist the Indian government in creating differential pricing for US FDA approved stents. The facts are that it’s the Indian medical device manufacturers who face discrimination in India and in USA. 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 couldn’t participate as the same had unfair specifications demanding a USFDA approved product.
The US has TBT — technical barriers to trade — under USFDA, while these are near non-existent in India for US device companies.
Indian manufacturers are barred from selling to the US government-funded health programmes and defense as India is not listed in their TAA (Trade Agreement Act).
India's medical device manufacturers are also discriminated against as the US has a ‘buy American’ policy. No such government support exists in India for domestic medical device manufacturers.
USFDA has increased registration charges by 33 percent to 126 percent from 2018. This makes it very expensive for Indian manufacturers/exporters to register for USA as applicable fees for 510K registration is USD 10,566 for each product compared to USD 4,690 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 to 100 times that values to justify absorbing such high costs.
The big question is should India bow to such threats to access the US market by group of three US MNC lobbies when the US is itself suffering from the highest healthcare costs in the world.
We call on the government of India 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 of US medical device companies indulge in India, which gives a bad name to USA. Such misinformation has the potential to harm excellent relationships between world’s largest two democracies.
We request Indian government and CCI to expedite its investigation on reported anti competitive practices in healthcare.
If they have to sell in India they have to respect Indian laws and regulations same as we do when we sell to EU/USA and other countries.