New Delhi: Syringe and needle makers have decided to cap trade margins at 75% after the country’s drug price watchdog weighed in, a development likely to bring down prices of these medical devices sharply.

The All India Syringes and Needles Manufacturers Association (AISNMA) on Thursday decided to implement the cap by 26 January.

Recently, the National Pharmaceutical Pricing Authority (NPPA) had said companies were charging excessively high prices on drugs and disposables.

In a recent investigation, NPPA found that Fortis Hospital in Gurugram had charged parents of a seven-year old girl who died of dengue in September an up to 1,700% mark up on medical equipment and drugs.

In October, the department of pharmaceuticals had held talks with stakeholders to discuss the impact on availability of medicines and prices if trade margins were capped. On Monday, NPPA called yet another meeting to discuss MRP and margins, specifically in disposables, syringes and needles.

“The NPPA advised manufacturers to consider regulating price themselves; otherwise, the government would be forced to take steps as they have done to cap prices in the past for items like stents and orthopaedic implants," a person aware of the matter said on condition of anonymity.

Following this, the executive body of manufacturers on Thursday asked members to consider printing reduced MRP beginning National Consumer Day on 24 December, by capping trade margins at maximum 75%, and implement it by latest 26 January.

“This period is to allow all manufacturers to clear current stock of their packing material with current MRPs and enable smooth transition," an AISNMA circular to the manufacturers said. The AISNMA also requested multinational companies to self-regulate their MRP on the basis of ex-factory or import-landed prices.

“Hospitals are buying medical devices from those manufacturers who keep high MRP of their products despite low ex-factory prices. This is nothing but profiteering at the cost of patients. This practice is putting a lot of pressure on other manufacturers," said Rajiv Nath, president, AISNMA.

“While we had been passing on benefits of improved efficiencies in manufacturing as lowered ex-Factory or discounted ex-factory prices, regretfully in most cases, the hospitals were pocketing the advantage and not passing on the benefit to end consumers; so though hospitals could exercise the option of selling below the MRP, very few did," Nath told Mint.

“Hailing government’s directives to regulate the margins and MRP on syringes to reasonable levels, we have taken immediate cognizance and decided to reduce trade margins to maximum of 75% on ex-factory prices (including GST)", Vimal Khemka, secretary, AISNMA said.

On 15 December, the NPPA had disclosed that Fortis Hospital had charged a margin of up to 1,737% on procurement price on a three-way stopcock. The drug price regulator had sought the details from the hospital, following allegations by the patient’s parents that the hospital overcharged them for medicines, gloves and syringes.

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