The Association of Indian Medical Device Industry (AiMeD) has urged the central government to take policy decisions to boost domestic manufacturing to make healthcare affordable in India. It also urged the government to initiate measures to expand the list of medical devices to bring more devices under price control.
The government has been taking measures to control prices of medicines and some devices like coronary stents, etc over last two years. This has been a welcome move. However, much more needs to be done and in a more planned manner in place of a piecemeal approach. To begin with, we need to understand that price control or MRP capping is important but a small step in making healthcare affordable in the long run.
"There is an urgent need for an integrated and calibrated development policy to put ‘Make In India’ initiative in medical devices sector in top gear and reduce high import dependency on foreign made devices in order to promote indigenous manufacturing of drugs and devices which would go a long way in making healthcare affordable”, said Rajiv Nath, Forum Coordinator, AiMeD.
As a first step, the government should consider granting tax/duty incentives and Price Preference in public procurement among other things to protect and promote domestic manufacturing. Simultaneously, price control measures should be undertaken. As of now, only coronary stents and some orthopaedic devices are being considered. But, the list needs to be expanded to include more devices, he said.
Besides, the government should introduce an Innovative Tax Structure of stalling Artificial Inflation of MRP e.g.1% GST Cess on MRP to have a disincentive to importers and manufacture from labelling device with excessive MRP.
For devices not notified as drugs, AiMeD has proposed to the DoP to fix the trade margin to a maximum of 50-100% (depending upon value) between import landed price / Ex Fcy price and MRP. If DoP accepts the formula, after consulting with AHPi and IMA it will provide tremendous savings to consumers as MRP will be substantially reduced.
Nath further said that Make in India of medical devices is already suffering and following MTAI recommended formula will make Indian manufacturing at a further competitive disadvantage. The government needs to take policy decisions to give strategic advantage to domestic manufacturing while safeguarding consumers or India will remain 70-90% import dependent. Only when it will be advantageous to manufacture in India only then will these importer /overseas manufacturers move manufacturing to India to retain market share and gain from that competitiveness created. India needs to learn from China who succeeded to drive FDI into manufacturing by manoeuvres of Preferential Market Access, Non Tariff Margins and punishing boldly errant companies doing unethical marketing.
Nath said that AiMeD welcomed FDI in manufacturing by overseas manufacturers, but not in import based pseudo manufacturing of these importer/ overseas manufacturers lobbies claiming to be Indian industry.