15th October, 2018
National

After NPPA Intervention, Syringe Manufacturers Cap Trade Margins At 75%

The prices of several Indian syringe and needle brands may now fall by over 50% after the domestic manufacturers have decided to reduce the maximum retail prices (MRP) of their products voluntarily.

The move comes after the National Pharmaceutical Pricing Authority’s (NPPA) said that pharma and drug companies priced drugs and disposables at excessively high prices. Also, there is a wide speculation that prices of more drugs and medical devices will and shall be controlled by the government.

The trigger

Sept 2017: After the complaint by the father of a seven-year old girl who died in Fortis Hospital, Gurugram, the NPPA found that the hospital charged up to 1,700% more on the medical equipments and drugs. This included syringes that were marked between 600%-1,200%. The needles were billed at 150-260% more than the hospital’s procured price.

In another case, the Max Super Specialty in Patparganj, was also found to be charging 527% more on syringes.

Now, 13 members of the All India Syringes and Needles Manufacturers Association (AISNMA) have confirmed to voluntarily reduce the MRP of their syringes and needles. The manufacturers who have agreed to implement the proposal form over 80% of the volume of country’s domestic needle market.  They will cap their trade margins at 75%. This means that distributor and retailer margins will be capped at 75%.

A peep into the trade-margins

Hindustan Syringes and Medical Devices Ltd (HMD), which works with Fortis Healthcare allowed margins of as high as 911% to Fortis with its MRP on syringes.

Capping of Margins

A capping on trade margins could drop prices of these products by 50% in nursing homes and chemists and nearly 70% at the hospitals.

Outcome

The NPPA advised the manufacturers to regulate the prices themselves earlier. It was also said any failure to do so would “force” the government to take steps to cap prices as done in stents and orthopaedic implants.

The AISNMA, body of medical needle manufacturers, on Dec 21 has asked members to print the reduced MRP. The reduced MRP shall be printed beginning National Consumer Day on 24 December and latest by 26 January.

The AISNMA has also requested the multinational companies to self-regulate their MRP on ex-factory or import-landed prices.

Shunning the profiteering at the cost of patients, AISNMA said that hospitals buy medical devices from manufacturers who print high MRP on their products despite low ex-factory prices. The hospitals pocket the advantage and do not pass the benefit to end consumers.