Last month, the Central government came out with a policy decision allowing 100 per cent foreign direct investments in medical devices sector through the automatic route. Although 100 per cent FDI is already allowed in the medical devices sector, such investment proposals have to obtain approval from the Foreign Direct Investment Promotion Board if it is to acquire an existing company. Now by freely allowing FDI into this sector under automatic route, the government feels that this sector should be getting a major boost in the coming years. Medical devices industry in the country is not that well developed and almost 70 per cent of the country’s requirements are being imported from the MNCs based in the US and Europe. As there has been no regulatory control in this sector, the MNCs have been freely importing and selling medical devices through their agents at exorbitant prices and making huge profits with the support of hospital managements and medical professionals. In fact, the matter has come to the notice of the National Pharmaceutical Pricing Authority recently and it has issued notices to the companies asking for details of pricing of devices like cardiac stents, drug eluting stents and orthopaedic implants which are regulated as drugs under the Drugs and Cosmetics Act. There were reports in the media that the prices of medical devices notified as drugs have been increased significantly during the recent past.

The government's move to allow 100 per cent FDI in brownfield projects is not however welcomed by a section of the domestic medical devices industry as they feel that such a step could kill these medium and small scale firms. The Association of Indian Medical Device Industry, a body representing  domestic medical device makers, has therefore urged the government to disallow 100 per cent FDI in brownfield projects. Major players in the Indian market are multinationals like Abbott Healthcare, Boston Scientific India, Zimmer India, Edwards Life Sciences, Johnson & Johnson, India Medtronic Corporate, B Braun Medical India, 3M India, Harsoria Healthcare and Roche Products India. All their products are highly expensive and unaffordable to poor patients in the country. As these are life saving products and used by all sections of the society, their quality and pricing have to be regulated while freely allowing investments in this sector. Currently, most of the small units engaged in the manufacture of medical devices do not use standard materials for their manufacture and follow GMP norms. Therefore, a comprehensive policy with regard to FDI, quality of materials used for making medical devices and an appropriate pricing mechanism is what is called for this sector.