Rationalising trade margin for medical devices an half-baked idea, say activists

Thinktank NITI-Aayog’s efforts to rationalise trade margin for those medical devices that are not under any form of price control has been labelled ‘half-baked,’ by civil society groups.

On June 8, the NITI-Aayog hosted a concept note on its website and invited comments from all stakeholders until July 15, on how best could prices for medical devices be regulated to make healthcare affordable.

Currently, of the 23 types of medical devices listed under Drugs and Cosmetics Act, only five including cardiac stents and knee implants, are under any type of price control.

For example, a cochlear ear transplant is out-of-bounds for a common man, as it costs anywhere between ₹5 and ₹20 lakh. Also, intra-ocular lenses used in cataract surgery can be priced between ₹200 and ₹4,000, and surgeries cost ₹50,000 or more. “Market of medical devices is so unregulated that distributors gain exorbitant margins, some times up to ten times the landing cost of the product or more,” S Srinivasan, Co-convenor of All India Drug Action Network (AIDAN), told Businessline.

“While the NITI-Aayog is pushing for rationalising trade margin gained by distributors for medical devices, no studies on research or costing for these medical devices have been commissioned. Also any effort to rationalise trade margin without a ceiling or price cap, could render the exercise void through manipulations in prices or price hikes through the introduction of new products,” said Srinivasan.

AIDAN has proposed that trade margins should not exceed 40 per cent for any medical device.

AIDAN also proposed that the government should set up a ‘Centre for Medical Technologies Guidance,’ on the lines of UK, to conduct a review of relevant published evidence and the likely costs of using the technologies.

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