Response to the announcement by All India Syringes and Needles Manufacturers Association (AISNMA) to voluntarily reduce trade margins to 75% on ex-factory prices

December 22, 2017.

We welcome the announcement by the syringe and needle manufacturers of their intention to reduce prices. However, throughout history self-regulation has never been an effective solution and often compromises transparency.

This initiative is a voluntary action by a group of Indian manufacturers to cut prices and its success depends on the willingness of all manufacturers to conform to the proposed reduction in trade margins and set lower MRPs. At the moment, not all the companies particularly the multinational companies are part of the initiative.

It is a well-known fact that it is the private institutional buyers that are taking maximum advantage of high MRPs to reap big profits. These players can still force manufacturers or a section of them to continue business per usual, at the expense of consumers. Such a scenario would be avoided under Government regulation that applies uniformly to all manufacturers.

Because of the misalignment of business interests with patient welfare, regulation in healthcare exists as the norm rather than exception around the world. The Government has a constitutional obligation to protect people from the exploitation of third parties and therefore needs to intervene to ensure affordability of medical devices.

Self-regulation does not guarantee compliance and cannot be enforced. Regulation is essential for enforcement and also works in favor of the long-term health of the domestic industry by ensuring a level-playing field is maintained across manufacturers.

Therefore, we call upon the NPPA to

– first and foremost publish data on the trade margins involved in medical devices notified as ‘drugs’ under the Drugs and Cosmetics Act and Rules falling in 19 categories that remain outside the purview of price regulation, and
– act without further delay to impose price caps as the only appropriate and sustainable measure to ensure affordability of these critical devices.

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