Fortis overpricing case: Now, medical devices to cost less than half

Medical devices
Price of syringes and needles is likely to come down sharply as manufacturers have decided to cap trade margins at 75 per cent. In a circular, the All India Syringes and Needles Manufacturers Association told its members to print the maximum retail price (MRP) on the basis of a maximum of 75 per cent margin (including GST) from December 24. The circular asked companies to implement this latest by January 26, 2018.

This period is to allow all manufacturers to clear the current stock of their packing material with current MRPs and enable a smooth transition. This covers all categories of syringes and needles - disposable, auto-disable, reuse prevention, needle stick prevention, insulin pen needle etc.

Members of the association account for an estimated 85% of the market for syringes and needles in India. A voluntary cap on them would, therefore, put pressure on foreign manufacturers to follow suit.

"We estimate that for many brands of syringes in the hospital segment, the prices will fall by at least two-thirds and in the chemists segment for many brands it will fall by half except for brands which were already selling for less than 75% trade margin," Rajiv Nath, president of AISNMA and chairman and MD of Hindustan Syringes and Medical Devices Ltd told Times of India.

Cut down price, says NPPA

The move comes after a meeting between the manufacturers and the National Pharmaceutical Pricing Authority (NPPA) officials. The NPPA had told the medical syringe manufacturers to cut down the price or the government will be forced to act.

Gurugram Fortis overpricing case

Last month, Fortis Memorial hospital in Gurugram charged 1,208-1,737 per cent more than procurement price for much of the medical equipment, including disposable syringes and three-way stopcocks, to the parents of seven-year-old dengue patient Adya who had died at the hospital.

According to the bills uploaded to the NPPA website, after they were submitted to it, the procurement cost of the disposable syringes were Rs 15.29 but the family was charged Rs 200 per syringe. The procurement prices for three-way stop cocks, used for infusion and invasive blood pressure monitoring, was Rs 5.77, however, the hospital charged the parents Rs 106 per unit, making them earn a margin of 1,737 percent.

Other equipment such as pressure monitoring line of 200 cm was procured by the hospital at Rs 17 while the parents were charged Rs 225 per pressure monitoring line, making the hospital earn a margin of 1,201 per cent.

The hospital had procured suction catheter thumb control for Rs 7.65 but the family was charged Rs 64 per piece.

According to the reports, the hospital charged the patient's family for every medical equipment by over 25 to 1,208 per cent.

"NPPA will be taking up the necessary action as per the existing law, " said an order by the NPPA issued on Friday.

Adya, a Class 2 student, developed a high fever on August 27. Her Dwarka-based family said they rushed her to Rockland Hospital in Dwarka two days later.

Tests confirmed she was suffering from dengue. However, since her condition worsened and Rockland suggested that she be transferred to another hospital, she was taken to Fortis where she remained on life support for two weeks.

Fortis raised a bill for 1,600 gloves, 660 syringes, high-end antibiotics, and sugar strips, according to family member.

Set up in 1997, NPPA has been entrusted with the task of fixation/revision of prices of pharma products, enforcement of provisions of DPCO and monitoring of prices of controlled and decontrolled drugs.

Medical devices will have to mandatorily carry MRP on packages

In August, the government informed Parliament that the consumer affairs, food and public distribution ministry has issued amendments making the rules "applicable to medical devices also".

Minister of State for Road Transport and Highways, Shipping and Chemicals and Fertilisers Mansukh L Mandaviya said in a written reply in the Lok Sabha that the move followed amendments to the Legal Metrology (Packaged Commodities) Rules, 2011.

"The rules make printing and labelling of MRP on the package mandatory. These rules shall be applicable from 1.1.2018," Mandaviya said.

In March, drug price regulator NPPA had stated that the 22 medical devices which have been notified as 'drugs' must all carry MRP on packs.

These devices included heart valves, surgical dressings, condoms, stents, disposable hypodermic syringes and orthopaedic implants, among others.

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