India rejects US request on price caps on medical devices
India has told the United States it
won't abstain from capping prices for more medical devices, regardless of
pressure to rethink its stance after price controls on heart stents and knee
implants spoilt the market for some US firms, sources familiar with the matter
said.
India's drug pricing authority is also
pushing to bring three more devices used while treating heart ailments under
the ambit of price controls as they are sometimes more expensive than the stent
itself, showed a government letter reviewed by Reuters.
India's $5 billion medical device market
has provided rich fishing grounds for US-based companies like Abbott
Laboratories and Boston Scientific Corp, but the prospect of price caps being
extended to more products sent shivers through their ranks.
In September, the United States Trade
Representative (USTR) wrote to Prime Minister Narendra Modi's office and Trade
Minister Suresh Prabhu urging them "to not expand price controls to
additional medical devices", according to a copy of the letter seen by Reuters.
During a meeting last month, Indian
officials told USTR Assistant Trade Representative Mark Linscott that India had
decided against making any such commitment, a trade ministry official told
Reuters on Tuesday.
"This position will not change, it
is within the right of the government of India (to impose price caps),"
said the official, who declined to be named.
Linscott "expressed concerns"
with India's stance during the meeting, another Indian trade official said.
A USTR spokesperson declined to comment
for this article, and PM's office did not respond to Reuters' queries.
Price controls form part of Modi's
broader agenda to improve India's dilapidated public health system and boost
affordability of treatment.
Equating high trade margins on some
medical devices with "illegal profiteering", the government last year
capped prices of some high-end heart stents - small wire-mesh structures used
to treat blocked arteries - at around $450, compared to $3,000 charged earlier.
During a visit to Britain last month,
Modi himself extolled the price caps' success in making treatment much more
affordable for Indians.
And India's National Pharmaceutical
Pricing Authority (NPPA) has been pushing for more price controls.
The regulator wrote to the health
ministry on February 26, asking for three other devices used to treat heart
ailments - cardiac balloons, catheters and guide-wire - to be added to a list
of products eligible for price controls.
In the letter, the NPPA described the
prices charged for these products as "exorbitant", and said companies
involved in bringing them to the market were enjoying high trade margins.
"Because of these exorbitant prices
of catheter and balloon, which are many times higher than the stent price
itself, the objective of price capping of stents gets diluted," the NPPA
said in its letter.
The NPPA also said intraocular lenses,
which are used during eye surgery, should be brought under the list.
A senior health ministry official told
Reuters that the NPPA's requests merited "consideration".
The medical device manufacturers argue
that India's price control mechanism hurts innovation, profits and future
investment, and the USTR described India's policy as "very
troubling". Indian trade officials anticipate coming under more pressure
from the United States.
The USTR is currently reviewing India's
eligibility under its Generalized System of Preferences (GSP), a program that
allows duty-free imports of certain goods. India was the largest GSP
beneficiary at $5.6 billion, the USTR said in April.
Bilateral trade rose to $115 billion in
2016, but the United States wants to reduce its $31 billion deficit with India and
is pressing New Delhi to ease trade barriers.
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