Background on Drug Pricing Policy
The National Pharmaceutical Pricing Policy (NPPP), notified on 7th December 2012, was established to create a regulatory framework for drug pricing. Its goal is to ensure the availability of essential medicines at reasonable prices, while also promoting innovation and competition within the pharmaceutical industry. This marked a shift from the previous ‘cost-based’ pricing model of the Drug Policy (1994) to the ‘market-based’ pricing model.
In line with NPPP 2012, the Government introduced the Drugs (Prices Control) Order, 2013 (DPCO-2013). Under this framework, the National Pharmaceutical Pricing Authority (NPPA) sets the ceiling price for all formulations listed in the National List of Essential Medicines (NLEM). Manufacturers must sell their products at or below this ceiling price. Moreover, NPPA monitors the prices of non-scheduled drugs, ensuring that any price increase does not exceed 10% annually.
Medical Devices and the National Medical Devices Policy 2023
With the enforcement of the Medical Device Rules, 2017, manufacturers and importers are obligated to declare the Maximum Retail Price (MRP) for medical devices, as per Clause 1.8 Appendix II and Clause 1.3 Appendix III of the Fourth Schedule. This is regulated by NPPA under the Drug Prices Control Order (DPCO), 2013.
A landmark decision came into effect on 01 April 2020, when the Department of Health & Family Welfare (DoHFW) officially recognized medical devices as drugs, following a notification issued on 11 February 2020. This expanded the scope of DPCO 2013, bringing all medical devices under the price regulation framework.
Key Points in the National Medical Devices Policy, 2023
(Ref: F. No. 31026/91/2015-PI-II)
Price Control for Medical Devices
The Drug (Prices Control) Order, 2013 (DPCO-2013) mandates that all manufacturers and importers of medical devices must declare the MRP on labels. The NPPA enforces this regulation to ensure affordable access to healthcare across India.
- Ceiling price fixation and trade margin rationalization have been implemented for selected devices, balancing patient affordability with industry growth.
- Future price regulation will consider innovation, life cycle costs, and patient needs.
To maintain ethical marketing standards, the Department of Pharmaceuticals will collaborate with the industry to implement the Uniform Code for Medical Device Marketing Practices (UCMDMP). This initiative aims to strengthen the transparency and ethical promotion of medical devices.
Looking Forward: Strengthening NPPA for Future Challenges
As the scope of medical devices under price control expands, it is vital to equip the NPPA with adequate manpower and expertise. This will ensure the authority can effectively regulate pricing, balancing innovation and affordability for both patients and manufacturers.
India's evolving medical device policy framework is aimed at making quality and effective medical devices accessible to all citizens at affordable prices, while maintaining a balance between public health and the growth of the medical device industry.
Important Note;
The products are regulated and as informed time to time by Indian Government or Department of Pharmaceuticals under National List of Essential Medicines
Need to inquire about specific medical device pricing or access regulations on pricing control for medical devices? Click the button below to access database or make an inquiry regarding medical device pricing.
Pricing Control of Medical Devices in India: A Necessary Step for Affordable Healthcare
India’s healthcare landscape has witnessed significant transformation in recent years, driven by advancements in medical technology and the growing need for affordable healthcare solutions. Central to this transformation is the regulation of medical device pricing, a critical factor that directly affects the cost of healthcare services. With the rapid increase in the use of medical devices across the country, it has become imperative to ensure these devices are accessible and affordable for the masses.
The Evolution of Pricing Control in India
India’s journey toward regulating medical device prices can be traced back to the government’s efforts to control the prices of essential medicines. The National Pharmaceutical Pricing Authority (NPPA) was established under the National Pharmaceutical Pricing Policy (NPPP), 2012, to regulate the prices of essential medicines listed in the National List of Essential Medicines (NLEM). This policy marked a shift from the traditional cost-based pricing to a market-based pricing model, ensuring that essential medicines were available at affordable rates without stifling innovation and competition in the industry.
Building on this foundation, the Indian government extended pricing control to medical devices, recognizing their growing importance in the healthcare system. In 2020, following a notification from the Department of Health & Family Welfare (DoHFW), all medical devices were officially classified as drugs, thereby bringing them under the purview of the Drug Prices Control Order (DPCO), 2013. This decision was a landmark move in the government’s efforts to regulate the pricing of medical devices and ensure their affordability.
Why Pricing Control of Medical Devices is Crucial
Medical devices play a pivotal role in diagnosing, monitoring, and treating patients. These devices range from simple tools like syringes and bandages to complex equipment such as ventilators, CT scanners, and pacemakers. While the advancement of technology has led to more innovative and effective devices, it has also driven up their prices, making many of these devices inaccessible to large segments of the population.
The lack of affordability in medical devices poses a significant challenge to India’s goal of providing universal healthcare. With a vast population that includes a significant number of economically disadvantaged citizens, the need for affordable medical devices is more urgent than ever. Price regulation is crucial to ensuring that all citizens, regardless of their financial status, have access to the medical devices they need for proper healthcare.
Moreover, the unregulated pricing of medical devices can lead to price gouging, especially in critical situations such as emergencies or pandemics. The COVID-19 pandemic was a stark reminder of this, as the demand for ventilators, oxygen concentrators, and other essential devices skyrocketed, leading to price hikes that made these life-saving devices out of reach for many.
Current Framework for Medical Device Price Regulation
Under the Drug Prices Control Order (DPCO), 2013, the NPPA is responsible for regulating the prices of medical devices in India. The NPPA monitors the prices of both scheduled and non-scheduled medical devices, ensuring that price hikes remain within reasonable limits.
For scheduled medical devices—those listed in the National List of Essential Medicines (NLEM)—the NPPA sets a ceiling price, which manufacturers and importers must adhere to. No company is allowed to sell these devices at a price higher than the ceiling price set by the NPPA. On the other hand, non-scheduled medical devices are allowed a maximum retail price (MRP) increase of up to 10% per year.
In addition to price regulation, the NPPA also focuses on trade margin rationalization, which aims to control the excessive margins added by various stakeholders in the supply chain. This initiative ensures that the final price paid by the consumer reflects a fair distribution of profit margins across the entire supply chain, from manufacturer to retailer.
Challenges in Implementing Pricing Control
Despite the regulatory framework in place, enforcing price control for medical devices remains a challenging task. One of the primary challenges is the diversity of medical devices in terms of their complexity, cost of production, and usage. Unlike pharmaceuticals, which have relatively straightforward pricing structures, medical devices often involve complex technology and innovation that require higher research and development (R&D) investments.
Moreover, the medical device industry is dominated by multinational corporations, many of which produce high-end devices that are imported into India. These companies often argue that stringent price controls can stifle innovation and limit the availability of advanced medical technologies in the country. They point to the need for a pricing framework that balances affordability with the need to incentivize R&D and innovation.
Another challenge lies in ensuring compliance with the pricing regulations. While the NPPA has the authority to penalize companies that violate the price controls, monitoring the vast and fragmented medical device market is no small task. The sheer number of devices, combined with the presence of both domestic and international manufacturers, makes it difficult to ensure that all stakeholders are adhering to the pricing guidelines.
The Need for Strengthened Pricing Controls
Given the importance of medical devices in modern healthcare, there is an urgent need to strengthen pricing control mechanisms in India. This includes expanding the list of devices under price regulation, improving transparency in the supply chain, and enhancing the NPPA’s capacity to monitor and enforce pricing regulations.
One way to achieve this is by introducing a Uniform Code for Medical Device Marketing Practices (UCMDMP). This code would regulate the marketing and promotional practices of medical device companies, ensuring that ethical marketing goes hand in hand with affordable pricing. By limiting unethical practices such as incentivizing doctors to recommend expensive devices, the UCMDMP could help drive down costs and improve access to affordable medical devices.
In addition, the government could consider implementing trade margin capping for a wider range of devices, particularly high-end equipment that is often sold at exorbitant prices. By capping the trade margins across the supply chain, the government can ensure that consumers are not paying excessive amounts for essential devices.
The pricing control of medical devices in India is not just a regulatory measure; it is a moral imperative. As the country strives to provide affordable healthcare for all its citizens, ensuring that medical devices remain within the reach of the common man is crucial. While there are challenges in implementing and enforcing price control, the government’s commitment to this cause, along with the strengthening of regulatory bodies like the NPPA, will pave the way for a more equitable and accessible healthcare system.