The US-based medical devices industry through the Advanced Medical Technology Association (AdvaMed) has approached the US Trade Representative (USTR) with a demand to partially or fully suspend or withdraw India’s benefits under the Generalized System of Preferences (GSP). This is a barefaced attempt to intimidate the Indian Government and retaliate against its decision to fix the retail prices of cardiovascular stents and knee implants in the public interest.
This issue is supposed to be discussed at the US India Trade Policy Forum to be held in Washington DC on 26th October. Against this background, the All India Drug Action Network (AIDAN) has issued the following statement:
All India Drug Action Network (AIDAN)
Access to health products is non-negotiable; the Indian Government should reject the bullying tactics of the US based medical device industry
25 October 2017, New Delhi
The All India Drug Action Network condemns the pressurising tactics of the US based medical device industry to undermine the Indian Government’s actions to make health products more affordable and accessible for millions of people.
The move of US multinational companies through the industry association, Advanced Medical Technology Association (AdvaMed) to approach the US Trade Representative (USTR) with a demand to partially or fully suspend or withdraw India’s benefits under the Generalized System of Preferences (GSP) is highly reprehensible. This is a barefaced attempt to intimidate the Indian Government and retaliate against its decision to fix the retail prices of cardiovascular stents and knee implants in the public interest and exposes the unabashed greed of the industry and its willingness to hold poor peoples’ health at ransom for the sake of maximising profits.
In the past, the US biopharmaceutical industry has used similar tactics – backed by the US government – to pressurise the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce and Industry to roll back decisions related to the rejection of patents on critical medicines such as sofosbuvir for hepatitis C. The US pharmaceutical lobby has also attempted to create barriers for the issuance of compulsory licenses on patented cancer medicines such as dasatinib, which are priced out of reach of most patients in India. Such pressurising tactics are now being applied by US corporations like Abbott, Boston Scientific and Johnson & Johnson to try and get the Indian government to dilute/reverse price control measures on essential medical devices that are increasingly being used to save lives and improve quality of life, and also to preclude policy interventions to safeguard the public health of people in India.
The well-thought-out decision to regulate the prices of cardiovascular stents and knee implants put an end to the rampant overcharging and the exploitation of patients by hospitals and doctors in collusion with companies.
Opposition to price control on coronary stents and knee implants
In the case of stents, data collected by the National Pharmaceutical Pricing Authority (NPPA) clearly show that cardiovascular stents were being sold by hospitals at extremely high markups from the price at which they were procured (for example, 436% for bare metal stents and 654% in the case of drug eluting stents, on average). This was an outcome of unethical business practices, established and institutionalised by the leading foreign stent manufacturers, which rely upon commissions to hospitals and kickbacks to members of the medical fraternity to boost sales and gain market share. Helpless patients were therefore being charged artificially inflated prices that bore no relation to the manufacturing or import costs.
Official investigations of the Maharashtra and Odisha Food and Drug Administrations have repeatedly documented unethical practices in respect of numerous other medical devices. The companies are cleverly trying to thwart much-needed governmental intervention to correct the prevailing situation of market failure and widespread exploitative pricing in medical devices.
The grievances propagated by the US medical devices industry are disingenuous on two other fronts. The Indian Government rejected the companies’ demand for differential pricing for cardiovascular stents based on claims of innovation due to the complete lack of any data to support such claims. In fact these companies (Abbott Healthcare, Boston Scientific and Medtronic) failed to submit verifiable and credible evidence to demonstrate clinical superiority of the so-called “innovative” stents. Closer scrutiny of the “innovative” stents showed that they are actually “me-too” products that were being sold at a premium in order to create more profits, to the detriment of patients.
Companies have also asserted that stent price control has resulted in major losses and will limit their ability to bring advanced stents to India. However, the Government’s capping of prices did not in any way impact on the margins of the companies, which remain highly profitable. Action was only taken to curtail the illegitimately high trade margins, particularly those being provided to hospitals.
We are outraged by the companies’ relentless propaganda and threats to withdraw high-end products from the Indian market in light of the huge profits they have made over decades while undeniably patients were being fleeced. Whereas in the US, the same companies and colluding hospitals have paid massive penalties for cheating the public, no actions have been taken in India to penalise companies for overcharging or to recover money on behalf of the people.
US based companies manufacturing orthopaedic implants have protested the Indian Government’s action to make knee implants more affordable and expand access for huge numbers of patients in need of knee replacements. The list of complaints – loss of profits, disincentive for innovation, etc. – lack merit as in the case of stents. Yet the industry continues its campaign of spreading misinformation.
The price control on stents and knee implants has stopped unethical marketing practices to a certain extent and brought a degree of relief to patients and their families. Any move to withdraw or weaken price controls would expose patients to exploitation and amount to a denial of access to affordable healthcare, particularly in the private sector system.
– We call on the government of India to uphold the constitutional obligation on right to health and reject any pressure to review price controls on medical devices.
– We ask that price controls are urgently expanded to cover 19 additional categories of medical devices classified as drugs under the Drugs and Cosmetics Act and Drugs and Cosmetics Rules.
– We call on the US government to refrain from exerting policy pressure on India for taking measures to make medicines and medical devices more affordable and accessible to patients that need them.
– We appeal to the Government of India to approach the Competition Commission of India to carry out an investigation into prevalent anti-competitive practices in the marketing of medical devices, especially stents and orthopaedic implants.