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Parliamentary panel asks govt to bring essential medical devices under NLEM

Gireesh Babu, New Delhi
Wednesday, September 21, 2022, 08:00 Hrs  [IST]

The Department-Related Parliamentary Standing Committee on ministry of health and family welfare has recommended to the Ministry to identify medical devices which are required for critical care to patients and list them in the National List of Essential Medicines (NLEM) as Scheduled Medical Devices in order to ensure pricing depending upon the cost, availability, need and affordability by the patients.

It has also recommended the Department of Pharmaceuticals to effectively implement the "Trade Margin Rationalisation" policy to address the issue of arbitrary pricing by importers.

In its 138th report on Medical Devices: Regulation and Control, the panel observed that there are only 4 medical devices (cardiac stents, drug eluting stents, condoms and intrauterine devices) that have been included in the NLEM and their ceiling prices are notified by National Pharmaceutical Pricing Authority (NPPA).

The remaining medical devices come under non-scheduled medical devices under the DPCO, 2013. While the NPPA monitors the maximum retail prices of all non-scheduled medical devices and ensures that no manufacturer increases the maximum retail price of any medical device more than ten percent of maximum retail prices during preceding twelve months, allowing a maximum increase of 10% may result in serious jump in prices in a span of few years.

“The Committee, therefore, strongly recommends that instead of this ‘same size fits all’ approach; the department, like risk-based classification of devices, should create separate baskets for medical devices for pricing depending upon their cost, availability, need and affordability by the patients. The devices which are required for critical care to the patients should ideally be categorised under "Scheduled Medical Devices" and be listed under National List of Essential Medicines,” it said.

Additionally, the pricing of medical devices should also take into consideration the cost of the manufacturing and the value the medical device adds to the patient experience and ease it brings to the physician. The Committee, therefore, recommended the department to strike a balance between providing affordable healthcare and providing quality healthcare. As mere providing healthcare services without considering how a product can best deliver desired outcomes for a sustainable period goes against the basic policy and principles of the welfare state.

In this regard, the Committee welcomes the government's decision to move from L1 (lowest price) procurement method to Quality-cum-Cost Based Selection (QCBS), thus incorporating the element of quality in public procurement.

The Committee further felt that quality comes from innovation and in the medtech sector, more than completely new inventions, incremental innovations to add features and improve accuracy & efficiency of the existing devices is the norm, so much so that more than 60% of the innovation is incremental innovation. A lot of effort and cost go into R&D, designing, testing, approvals and marketing before innovative products are provided to the needy persons.

“The Committee is of the opinion that till the time the desired synergy between Government policies, initiatives, academic institutes and medtech industry is established to create an ecosystem for innovation and R&D in India, so that cost of production of innovative products comes down, the government shall continue with steps like price exemptions, value based procurement and subsidy support to the domestic manufacturers. The Committee is of the opinion that the measures so undertaken would result in boost of demand generation as good quality products would be available at affordable prices,” averred the report.

Besides the factors like availability of technology and raw materials, the phenomenon of inflation in medical devices is due to unfair trade practices by certain entities, it opined. The Committee then listed certain measures to provide a level playing field to the domestic medical device manufacturers and curb the artificial inflation in the prices of medical devices.

“Certain MNCs (multinational companies) avoid printing of MRP on each unit of product, so that the buyer (large distributors and hospitals) can list such a price to derive high profits, resulting in unnecessary surge in prices of medical devices. The DoP, in coordination with the Ministry of Finance, must ensure strict adherence to the compliance of the rule which necessarily mandates the printing of MRP on each product. The department through the ministry concerned should instruct the Port officials to check each medical device consignment for compliance of the said rule, so that the issue can be addressed at the origin,” it added.

“Some manufacturers indulge in manufacturing of low-cost but substandard products that wholly disturbs the market for genuine manufacturers who comply with all the regulations and standards. The Committee, therefore, strongly recommends for strict surveillance over entry of sub-standard medical devices into Indian market so as to avoid hazardous impact on patient’s health,” said the Panel.

It also recommends the department to effectively implement the "Trade Margin Rationalisation" policy to address the issue of arbitrary pricing by importers. Considering the number of supply chains in a vast country like India, the department needs to have consultation with all the stakeholders in the industry.

“The Committee believes that thorough consultation with all the stakeholders would help the department in arriving at a justified trade margin by which not only the interests of consumers, suppliers and manufacturers would be taken care of but also the problem of irrational pricing would be resolved. Effective implementation of "Trade Margin Rationalisation" (TMR) would result in lower out-of-pocket expenditure which ensures that families are not pushed below the poverty line due to the medical expenses,” it added.

 

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