The Association of Indian Medical Device Industry (AIMED) has expressed deep disappointment over the draft Medical Devices Preferential Market Access (PMA) Policy issued by DoP recently.
“We are disappointed with the Draft of PMA policy issued by DoP. We will study it collectively and respond shortly but it is a clear case of a lost opportunity to promote indigenous manufacturing of medical devices to boost ‘Make in India’ initiative,” said Rajiv Nath, Forum Coordinator, AIMED.
The Draft PMA policy in its present form does not provide Preferential Pricing to Indian manufacturers, no incentives on maintaining and improving quality, indigenous development and no redressal/penal provisions against use of exclusionary 3rd country regulatory approval mandatory clauses e.g. US FDA. It doesn’t provide for any corpus for ensuring no late payments by government. Such a corpus would be necessary to ward of any adverse impact on financials of a company in case of delayed payments by the government.
AIMED had made some suggestions to the government which included preferential pricing for domestic manufacturers based on World Bank norms; preference for ICMED/ISO certified manufacturers to boost quality; preference for Design India certified manufacturers to boost indigenous development; timely payment against government supplies; and penal provision against hospitals that keep exclusionary compliance clause of US FDA certification as 3rd country regulatory approval.
“We are yet to study the Draft PMA in detail and take a stand but regret to note that these suggestions made by us to give encouragement and boost to manufacturers producing in India over imports have not been considered,” Nath regretted.
“The Prime Minister wants to boosts Make in India with Buy in India and DIPP provided a Preferential Purchase order with a 20% margin of preference for domestic manufacturers. However this margin of preference is not preferential pricing of 20% as is case in some countries like China which we are informed gives 15-25% price preference and others like Malaysia, Jordan, Uganda, Indonesia etc give 15% but DIPP Order only allows Indian bidders to match the L1 Lowest price bid of a foreign manufacturer (Read Chinese) if his bid was within 20% range. The whole intention of Prime Minister and of amending GFR 153 got diluted, we wonder if he's aware of this,” Nath said.
Consider also USA which will use a Non Tariff Barrier, that only countries recognised in their Trade Agreement Act are allowed to sell to US Govt Institutions and countries like India, China and South Africa etc are even unable to bid whereas the DoP PMA guidelines has no Penal Action or disciplinary actions like not allowing access to Finance to procure medical devices where tenders use exclusionary mandatory Clauses of compliance e.g. Regulatory Approval by US FDA (and CE) to keep out Indian manufacturers from bidding in their own country tenders. The option to match L1 Lowest price of a Chinese product is not a preference to an Indian manufacturer - its only an option and this will hardly incentivise Indian manufacturing. Compare this to other countries like Indonesia, China, Malaysia, Jordan, Uganda etc. that give 15% or higher price preference to manufacturers who produce in their country. This has motivated importers to shift manufacturing base to these countries to retain market share and given competitive advantage to domestic producers to add capacity. Sadly, an opportunity to boost Make in India Medical Devices is being lost, opined Nath.
We can match prices of any country other than China as it has no global market economies but a subsidized state sponsored eco-system. How can we compete with low priced imports from China with non-remunerative, non-sustainable pricing unless Indian government has supportive policies, Nath asked insisting India needs to follow the UN system of procurement based on sustainable costs and not based on L1 Lowest pricing that motivates some manufacturers to cut corners in regard to quality and service delivery of product and give poor image to Brand India.
By denying preferential pricing to Indian manufacturers, the Draft policy guidelines can be said to be bordering on encouraging ‘Pseudo manufacturing’, he felt. It is sad that genuine concerns and suggestions of domestic medical device manufacturers are being repeatedly sidelined.