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Govt gets ready for USTR talks amid hectic MNC lobbying on medical device pricing
Arun Sreenivasan, New Delhi | Monday, April 9, 2018, 08:00 Hrs  [IST]

As clock ticks on the crucial talks with Assistant US Trade Representative Mark Linscott, Indian Commerce Ministry team is leaving no stone unturned to withstand multinational manufacturers’ hectic lobbying in Washington for watering down the country’s pricing policy on medical devices, it is learnt.

Multinational medical device manufacturers have been working overtime to dilute the country’s drug pricing regulations by calling on Washington to use Generalised System of Preferences (GSP) as a bargaining chip. Indian officials are fully aware of the problem and are well-prepared to stand their ground even if Linscott and his team raise the spectre of GSP suspension during the meeting in New Delhi on April 9, a top industry source said.

GSP is a preferential tariff programme that Washington offers to exporters from developing and developed countries. The benefits under the GSP include duty-free entry of goods including chemicals, gems and textiles.

“We would highlight the Union government’s proposal for a drug price overhaul and the National Pharmaceutical Pricing Authority’s (NPPA) green light to discontinue production of coronary stents after a six-month notice period as concrete steps to ensure a level playing field in the industry,” the person said on condition of anonymity.

With the transfer of its chairman last month, the national drug price regulator has become a headless body. According to the source cited above, the transfer of the chairman hints at a new official approach towards drug pricing.

It may be noted that to discuss a new pricing mechanism, the Prime Minister’s Office is meeting officials from the department of pharmaceuticals (DoP), Niti Ayog, the NPPA and the health ministry only a day after the talks with the USTR team.

“The multinational manufacturers are unnerved by the price cap on medical devices like coronary stents and knee implants. The government refused to change price revision on stents and ruled out differential pricing. There is also talk of trade margin capping,” an activist associated with the All India Drug Action Network pointed out.  

Within months after the NPPA passed the order slashing the prices of cardiac stents by as much as 85 per cent, multinational stent makers such as Abbott, Medtronic and Boston Scientific Corporation filed applications with the regulator to withdraw their new generation stents from the country saying the pricing regime made their products unviable. However, the DoP invoked the powers under Section 3 of Drug Price Control Order to restrict the companies from withdrawing their products. In February, the pricing watchdog changed stance and allowed firms to discontinue products after giving a notice.

“The decision to prohibit companies from withdrawing from market was a key reason that prompted industry lobby groups like the Advanced Medical Technology Association to seek the intervention of the USTR. Since that rule is gone, the MNCs’ complaint is uncalled for,” an industry representative added.

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