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.