India Adds First Medical Device to Price Control System

With the publishing of the ‘Drug (Prices Control) third amendment Order, 2016’ on December 21, 2016, coronary stents were added the list of devices subject to government price controls. Included in the product definition are bare metal stents, metallic drug eluting stents, and bioresorbable vascular scaffold/biodegradable drug eluting stents.

Importers of notified cardiovascular and orthopedic devices were cautioned in June of last year to control mark ups, or the government would intercede. Now, limits will be applied to the difference between landed cost and the Maximum Retail Price (MRP) anticipated to be around 35%. (A meeting will be convened this month by the National Pharmaceutical Pricing Authority (NPPA) at which point the exact pricing structure will be determined. Implementation is expected as early as May 2017.

The practical implication of price controls is negative pressure on the top line revenue for affected importers/distributors with subsequent belt-tightening likely. Sales channel efficiency will become increasingly important. While cardiovascular stents are the first medical devices to be added to the Drug Price Control Order (DPCO), others that are likely to follow soon include orthopaedic implants and intra ocular lenses.

Asia Actual will continue to monitor the situation from our Delhi office and report on developments.