Medical devices industry urges govt to ensure compliance of labeling requirement as is done in drugs

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Medical device industry has urged the ministry of consumer affair and ministry of finance to ensure compliance of the rules related to labeling requirement. It has also asked to mandate printing of maximum retail price (MRP) on each unit pack of medical devices at the time of import by deputing a port officer for checking each shipment of medical devices.

This has to be followed much in the similar manner as is being followed by Drug Controller General of India (DCGI) for the pharmaceuticals whereby the port officer/ADC Port issues the clearance for each shipment of pharmaceutical products to the Customs Officer as per the Drugs & Cosmetics (D&C) Act.

Department of Consumer Affairs through a notification dated June 23, 2017 had made it mandatory for all medical devices including those notified as drugs to have MRP on unit pack and if sold by a hospital to patient then they can’t claim the status of institutional customer. Additionally, country of origin is now mandated to be labeled on the unit pack.

Said Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry (AiMeD), “Many state level and world bank assisted public health tenders have a price benefit of 10 to 15% for Indian origin goods to help establish the domestic industry of medical devices. In the absence of enforcement of labeling of country of origin, benefit would not be available to an Indian manufacturer who has spent a considerable amount of money to establish a factory and infrastructure to manufacture medical devices.”

Now that GST has been introduced and there is a uniform tax structure, Government may consider to regulate the maximum mark up between ex factory (weighted average price) and the MRP. This is because ex factory price is coming down by competition but retail prices are shooting up to induce Indian retailer/corporate hospitals to push their brands by offering superior trade margins. This is a never ending race and the consumer is needlessly suffering with this artificial inflation.

The Medical Device Market in India which is over Rs. 70,000 crore at retail and institutional level is mainly dominated by imports. Corporate Hospitals and MNC’s have lobbied for 0% import duty in name of affordability and accessibility of medical devices over the last 10 years without any proof of passing reduction of MRP to consumers who have actually suffered by artificial inflation.

Retailers and hospitals prefer to use imported devices with derived higher profitability as in many cases imported unit packs do not carry MRP but this is labeled only on their shelf box which enables them to charge any price as per their discretion and also for many medical devices the importers by claiming goods are for institutional sales and not for sales over the retail counter so MRP not applicable. Domestic manufacturers need to print MRP on unit pack and complied.

On the devices that did carry MRP the market has witnessed huge disparities in MRP between brands of various suppliers for same / similar products as a higher MRP (and higher trade margin) strategy to induce retailer and hospital to push their brand. The market is not operating based on open competition to drive down prices but is skewed leading to rapid artificial inflation as domestic manufacturers also increase their MRP to catch up and offer similar profitability.

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