Price control might affect India’s appeal as go-to destination of medical tourism: US

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The US government has once again raised concerns over price controls of medical devices in India.

The United States Trade Representative (USTR) Robert Lighthizer in a letter written to Suresh Prabhu (Minister of Commerce and Industry) and Nripendra Misra (Principal Secretary to the Prime Minister) last month said the pricing policy has created “serious problems for US companies that sell these products in the Indian market.”

Lighthizer warned Indian government that its price control policy of medical devices is causing US producers to rethink their presence in the Indian market and is discouraging them from introducing their latest technologies for coronary stents and other medical devices.

“We believe that this situation can adversely affect India’s appeal as a destination for medical tourism, which is a critical contributor to the Indian economy,” he added.

Lighthizer specifically mentioned the NPPA order capping the prices of coronary stents for not sufficiently differentiated drug-eluting stents based on the level of technology.

“This has disproportionately affected the most innovative and advanced stents, most of which are imported,” Lighthizer said.

Lighthizer added that the ceiling price under NPPA order is also below the cost of production for the most innovative stents.

“Since NPPA has denied applications by US companies to withdraw those products from the market, they have been forced to continue to sell these products in India at a significant loss,” he added.

USTR raised the matter during Prime Minister Narendra Modi’s visit to Washington DC in June.

Suresh Prabhu who is in the US will be meeting Robert Lighthizer today.

Earlier this week US multinational companies through the industry association, Advanced Medical Technology Association (AdvaMed) filed a petition with the USTR seeking partial or full suspension or withdrawal of benefits provided to India under the Generalized System of Preferences (GSP).

GSP is a preferential tariff system extended by developed countries to developing countries.

“AdvaMed and its members are deeply concerned about recently implemented price controls on coronary stents and knee replacement implants in India that have slashed prices by as much as 85 percent and 70 percent, respectively, followed by signals that price caps for additional life-saving and life-improving medical devices may be forthcoming,” the industry lobby group said in its petition to USTR.

NPPA in February this year issued a notification capping coronary stent prices, bringing the prices down by as much as 85 percent.

The medical devices industry, especially the multinational companies, have opposed the regulation of stent prices, and warned that the decision will stifle access to innovative and advanced therapies for patients.

About three-fifths of the market for stents is shared by multinational companies such as Abbott, Medtronics, Meril Lifesciences and Boston Scientific.

Patient advocacy group All India Drug Action Network (AIDAN) have asked the Indian government not to succumb to the pressure tactics of US and its multinational companies.

“This is a barefaced attempt to intimidate the Indian Government and retaliate against its decision to fix the retail prices of cardiovascular stents and knee implants in the public interest and exposes the unabashed greed of the industry and its willingness to hold poor peoples’ health at ransom for the sake of maximising profits,” said AIDAN said in a press statement.

“We ask that price controls are urgently expanded to cover 19 additional categories of medical devices classified as drugs under the Drugs and Cosmetics Act and Drugs and Cosmetics Rules.