USTR asks India to reconsider price cap on medical devices

As the Department of Pharmaceuticals plans to bring more medical devices under price cap, the pressure is mounting on the government to prevent it from taking such a step. In the latest move, the US Trade Representative (USTR) has written to Commerce Minister Suresh Prabhu raising concerns over the capping of prices of coronary stents and orthopaedic implants. The USTR has also reached out to the Prime Minister’s Office (PMO).

The letter from USTR Ambassador Robert E Lighthizer states, “The pricing policy has created serious problems for the US companies that sell these products in Indian market. The National Pharmaceutical Pricing Authority (NPPA) order on coronary stents does not sufficiently differentiate drug-eluting stents based on the level of technology.” 

The letter adds that the ceiling price of some stents is below the cost of production, which is not in the interest of innovating companies as well as patients. 

The Department of Pharmaceuticals and the NPPA, in a recent meeting on capping prices of devices, found the maximum retail price (MRP) of a certain device at as much as Rs 20,50,000, with margins ranging between 63 and 244 per cent. In the case of another device, the MRP was between Rs 800,000 and Rs 15,00,000, with margin at 80 to 120 per cent over the import price. 

Meanwhile, the government move to cap device prices is getting political attention too. For instance, Aam Aadmi Party (AAP) MP Dharamvir Gandhi has written to the commerce minister supporting the price cap decision. He has even asked the government to retaliate if the USTR withdraws trade incentives for Indian companies. The letter states, “In case of any action from the USTR to withdraw partial or full GSP, withdrawal should be retaliated with increasing tariffs of not only medical devices having domestic manufacturing capabilities but also on some of the luxury goods like Harley Davidson bikes.” 

The multinational device industry had recently asked the USTR to do away with import benefits extended to Indian companies in response to the price capping mechanism adopted by the NPPA. The government had a few months ago brought coronary stents and orthopaedic knee implants under price cap after it was found that trade margins were extremely high.

• USTR has written to Commerce Minister Suresh Prabhu raising concerns over the capping of prices of coronary stents and orthopaedic implants
• The pharmaceuticals department and the NPPA found the MRP of a certain device at as much as ~20,50,000, with margins ranging between 63 and 244%
• AAP MP Dharamvir Gandhi has also written to the commerce minister supporting the price cap decision
• The govt had brought coronary stents and orthopaedic knee implants under price cap after it was found that trade margins were extremely high