Surgical device manufacturers asked to explain hike in prices of products

Amid allegations that the National Capital Region (NCR)-based private hospitals were making profits from non-scheduled drug formulations and medical devices, the pharmaceutical pricing regulator is learnt to have sent show-cause notices to surgical product manufacturers, who have raised product prices by more than 10 per cent. Industry players, however, claim that the regulator needs to take a realistic view as they have merely rounded off the prices to make it less cumbersome for buyers. 

The National Pharmaceutical Pricing Authority (NPPA) has recently sent notices to surgical device makers, asking them to explain the rise in prices of their products by more than 10 per cent, sources said. A recent analysis found that non-scheduled drugs and devices constituted major portions of bills charged by the hospitals. The Drug Price Control Order (DPCO) 2013 does not allow companies to increase prices of non-scheduled formulations by more than 10 per cent annually. For the scheduled category, the price caps are decided every year based on the wholesale price index. 

Hindustan Syringes and Medical Devices (HMD) (makers of widely used Dispovan syringe) has been sent notices for 53 of its surgical devices, including syringes. In response to the regulator's notice, the company has claimed that these products do not come under the DPCO for regulation, or in other words they fall in the non-scheduled category. 

HMD has said, "It may be noticed, we have not increased MRP in 2014, since it will violate the definition clause of the Legal Metrology (Packaged Commodities) Rules, 2011, as much as by a fraction of less than fifty paise to be rounded off to the preceding rupee, though actually we have increased the same. Again by printing MRP, public will suffer since 20 paise (10 per cent of Rs 2) or 30 paise (10 per cent of Rs3), etc are not available in the market." 

The firm has argued that, in the same way, asking the company to increase price by 10 per cent will impact distributors and stockists. 

One of the products is a scalp vein set, for which the price increase has been 13 per cent, according to the NPPA. The company manufacturing the scalp vein set, Romsons Scientific and Surgical Instruments, has told the NPPA that the increased price was only a round figure - Rs 18 instead of Rs 17.60. 

Another company, Surgiwear, has also been issued show cause notice for 12 products, including internal prosthetic implants, bone cement, eye dressing materials. Sources say the notice has been sent to the company for charging Re 1 more than what is allowed. 

The companies argue that they do not fall under the drug price order and that they are actually governed by the legal metrology act.