The All India Syringes and Needles Manufacturers Association’s (AISNMA) move to self-regulate the maximum retail price (MRP) and trade margins to avoid stern action by the National Pharmaceutical Pricing Authority (NPPA) has hit a wall as four multi-national companies refuse to comply with the plan, it is learnt.
The NPPA has asked the syringe and needle manufacturers to set trade margins at maximum 75 per cent over discounted ex-factory prices including GST on a voluntary basis and comply with it by January 26.
The AISNMA has agreed to the directive and many manufacturers printed reduced MRP on product packets on the basis of voluntary capped trade margins of maximum 75 per cent over their discounted net ex-factory prices. However the pre-emptive measure, which has got the green light from 17 manufacturers including Japan-based Nipro, is running into trouble as Becton Dickinson, B Braun, Lifelong and Tiger Medical are unwilling to comply with the move.
In a letter written on February 22 by AISNMA officials to NPPA chairman Bhupendra Singh, which has been reviewed by Pharmabiz, the group has requested the regulator to call another meeting of the syringe and needle makers to discuss the stance taken by the four companies. As per the letter, 17 manufacturers – HMD, BioMed, HiTech, Shreyans, One Touch, Guru Mangalam, PH Healthcare, Veekay Surgicals, Romsons, SRS, Dora, Nihal, Maruti Meditech, Prickwell, Pristine, RR Medicare and Nipro – are committed to abide by the association’s decision.
Speaking to Pharmabiz, AISNMA president and AIMED Forum Coordinator Rajiv Nath expressed his disappointment over the stance of the reluctant four. “If MNCs’ heart bleeds for the consumer and they oppose any move to increase tariff to make manufacturing viable in India with claims that it will hurt consumers then they should be reducing MRP as trade margins don't go in their pocket but are only means to attain or retain a hospital account,” he said.
Importers lobby want trade margins to be capped on the basis of price to distributor and not on landed price of imports. According to Nath, the multi-nationals are unwilling to slash MRPs and are using the opportunity to win back hospital accounts.
But activists and NGOs in the sector remain skeptical over the industry move to self-regulate to avoid the regulator’s wrath. “Self-regulation cannot be enforced and does not guarantee compliance. We cannot trust the industry on this. A regulatory framework is the only solution,” S Srinivasan, co-founder of Locost and a member of the All India Drug Action Network (Aidan), a network of NGOs, opined.
The NPPA has stepped in to cap MRP and margins allowed on disposable syringes and needles after a probe report recently revealed that some hospitals are taking margins of anywhere from 1,000 per cent to 1,700 per cent on procurement prices. The cap will be applicable to all categories of syringes and needles including disposable, auto disposable, reuse prevention, needle stick prevention and insulin pen needles.
Over the past one year, the NPPA’s effective interventions have brought down the prices of coronary stents and knee implants substantially. As the regulator faces calls to shift focus to other medical devices and consumables, many industry observers moot trade margin rationalisation instead of price capping of medical devices as a way to make healthcare affordable for the masses. Price caps will only dis-incentivise innovation and flexible pricing strategy is imperative to make technological innovations commercially rewardable, they say.