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Ramesh Shankar
Wednesday, January 24, 2018, 08:00 Hrs  [IST]

The All India Syringes and Needles Manufacturers Association has recently announced its decision to voluntarily cap trade margins on syringes and needles to a maximum of 75 per cent on ex-factory prices including GST latest by January 26, 2018. The Association, as part of its self-regulatory measure, has also announced that this could also be considered for other medical consumables or disposables, other than implants, notified as drugs. The Association's decision to self-regulate was prompted by the drug pricing regulator NPPA's stern warning to the manufacturers 'to either voluntarily limit the margins and MRP or the government would have to step in to regulate them'. The entire issue of exorbitant pricing of medical consumables came into the forefront after a probe conducted by the NPPA into the billing practices of Fortis Hospital revealed that the hospital had charged up to 1730 per cent margin on medical consumables over the procurement price. The NPPA report was based on the bill that the hospital had generated in the treatment of seven-year-old Hadiya, who later died of dengue, due to the hospital's negligence.

Now, the question that arises in everybody's mind is whether this self-regulation announced by the manufacturers will succeed without any regulation and save the hapless patients from the exploitative hands of these hospitals. Experts and health advocacy groups have already raised their eyebrows as they are skeptical about the success of this pre-emptive move of the association to reduce the prices of these medical consumables. Their skepticism stems from the fact that this initiative is a voluntary action by a group of Indian manufacturers to cut prices and its success depends on the willingness of all manufacturers to conform to the proposed reduction in trade margins and set lower MRPs. At the moment, not all the companies are part of the initiative. The multinational medical devices lobby group MtaI is on record saying that it is not joining the lobby group of domestic syringes and needle manufacturers that have decided to voluntarily reduce the MRP of these products. It is a fact that hospitals are taking maximum advantage of high MRPs to reap big profits as they buy these devices from those manufacturers who keep high MRP of their products despite low ex-factory prices. This is nothing but profiteering at the cost of patients and this practice is putting a lot of pressure on other manufacturers as market players to do the same. These players can still force manufacturers or a section of them to continue business as usual, at the expense of consumers. Such a scenario can be avoided only if the government comes out with a regulation that applies uniformly to all manufacturers. History is replete with instances that self-regulation may not become an effective solution, especially in a vast country like India where even the regulations are implemented more in its violation rather than its compliance. Because of the misalignment of business interests with patient welfare, regulation in healthcare exists as the norm rather than exception around the world. So, the government has a constitutional obligation to protect people from the exploitation of third parties and therefore needs to intervene to ensure affordability of these critical devices.


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pradeep awasthi Jan 30, 2018 9:33 AM
In an ongoing decade,Our Indian pharmaceutical companies are under the continuous threat of Union government as well as NPPA in terms of both qualitative aspects of products and prices which are kept under control by DPCO and Panel of stake holders,which keep price under regulation.

The most recent decision of association of needle and syringes manufacturers to restrict the margin on its consumable products,is a welcome step to bring reforms in terms of exorbitant prices which are leveraged by big corporate hospitals on patients.This has been further strengthened by NPPA's decision to comply with its demand of restricting the margin on consumables.But still there is disparity in implementing this capping of price,As the government has no drafted policy of capping the price.Therefore to protect patient from exploitation of hospitals,Its mandatory for government to have a regulatory protocol of fixing margin on MRP of this products.
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