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AIMeD urges govt not to bow down to unethical demands of US medical device cos
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Ramesh Shankar, Mumbai
October 31 , 2017
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The Association of Indian Medical Device Industry (AIMED) has lashed out
at US multinational medical devices companies and their association
AdvaMed for daring to take government of India to ransom with their arm
twisting techniques and to pressurize the government to bow down to
their unjust demands.
AdvaMed had recently approached the US
Trade Representative (USTR) with a demand to suspend or withdraw India’s
benefits under the Generalized System of Preferences (GSP).
Rajiv
Nath, Forum Coordinator, AIMED, said that it is shocking to see how US
MNCs are lobbying with the USTR for using threat of access to the US
market by Indian exporters and to suspend or withdraw Indian exporters
import duty benefits under GSP to arm-twist the Indian government in
creating differential pricing for US FDA approved stents. Countering
Advamed's claims, Nath revealed that the US has TBT --Technical Barriers
to Trade-- under US FDA, while these are near non-existent in India for
US device companies.
Indian manufacturers are barred from
selling to the US government-funded health programmes and defence as
India is not listed in US Trade Agreement Act referred to as TAA (Trade
Agreement Act). Indian medical device manufacturers are also
discriminated against as the US has a 'Buy American' policy. No such
government support exists in India for domestic medical device
manufacturers. These lobbying forces only care about access to Indian
markets. Most of them just import. Hardly any of them manufacture in
India--they lobby against tariff increase and state it will hurt
consumers but do not wish price controls which will actually benefit the
consumers.
The US FDA has increased registration charges by 33%
to 126% w.e.f. 2018. This makes it very expensive for Indian
manufacturers/exporters to register for USA as applicable fees for 510K
registration is $10,566 for each product compared to $4,690each in
2017 and premarket approval for high risk device is at $310,764 up
from $234,495. So a manufacturer would need to be exporting and
selling at least 50 to 100 times that values to justify absorbing such
high costs.
The National Pharmaceutical Pricing Authority (NPPA)
had capped stent and knee implant prices after studies by it revealed
huge trade margins being used to induce hospitals and doctors to use
these devices at exorbitant prices to patients. Data collected by the
NPPA clearly show that cardiovascular stents were being sold by
hospitals at extremely high markups from the price at which they were
procured (for example, 436% for bare metal stents and 654% in the case
of drug eluting stents, on average).
This was an outcome of
unethical business practices, established and institutionalised by the
leading foreign stent manufacturers, which rely upon commissions to
hospitals and kickbacks to members of the medical fraternity to boost
sales and gain market share. Helpless patients were therefore being
charged artificially inflated prices that bore no relation to the
manufacturing or import costs.
"Over the last two decades, the US
medical device companies colluded with the hospitals and doctors in
India to create an image that the multi-national products are better in
terms of their efficacy and safety. Most of this efficacy was
'perceived' and has not been clinically proven. And that's why the price
cap was set on various medical devices,” Nath said.
Whereas,
price caps have corrected the skewed market place and now helping Indian
medical device makers grow positively resulting in Indian stent
manufacturers to grab 50% this year and hopefully 60% of the market
share by next year based on price and quality competitiveness.
Applauding
the government of India for making these essential medical
devices/products available across the country at affordable prices to
the advantage of consumers and simultaneously boosting the idea of
domestic manufacturing, increasing the market size and also for
providing a level playing field for the Indian manufacturers, AiMeD
urged Indian government to not to bow down to the unethical demands of
US medical device companies/Association.
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