Price Capping in India by NPPA

The National Pharmaceutical Pricing Authority (NPPA) in India is a regulatory body responsible for controlling and regulating the prices of pharmaceuticals, including medical devices. It periodically identifies and notifies specific medical devices that come under price control, and fixes their maximum retail prices based on manufacturing costs, trade margins, and market dynamics. The policy has had a significant impact on the affordability and availability of medical devices in India but has also been a subject of debate. The objective is to ensure that medical devices are reasonably priced and accessible to a larger population, especially in cases where these devices are critical for treatment and diagnosis. 

Role of Multinational Corporations
The Indian market is heavily populated by multinational firms involved in the medical device sector. If their products come within the regulated category, MNCs may be directly impacted when the NPPA applies price-limiting measures such as

• Price limiting may disrupt MNCs’ pricing plans, especially if they were charging more for their products prior to regulation. To stick to the capped rates established by the NPPA, they might need to modify their pricing policies.
• Price caps can level the playing field by bringing down price differences between brands. As MNCs must align their price with the capped rates, encouraging affordability and accessibility for patients, this may encourage fair competition.
• Price caps would prevent MNCs from offering cutting-edge medical gadgets in the Indian market. They claim that price caps might hinder research and development efforts and perhaps have an adverse effect on the overall quality and innovation of medical devices due to the lower profit margins they would generate.
  

Role of Indian Manufacturers
Indian manufacturers play a crucial role in price-capping activities by providing inexpensive alternatives, encouraging market rivalry, supporting local production, ensuring quality assurance, and stimulating innovation. Their active involvement helps a greater population in India have access to and purchase necessary medical equipment.

• Indian manufacturers play a key role in providing cost-effective alternatives to expensive imported medical devices to ensure affordability for patients.
• Price capping promotes fair competition in the medical device industry, allowing Indian manufacturers to provide affordable options to consumers, fostering competition, and offering a wider range of choices.
• Indian manufacturers are encouraged to invest in research and development to innovate and improve their products, promoting indigenous technological advancements, stimulating innovation in the medical device sector, and creating a self-sufficient industry.
  

Coronary Stents

The coronary stent market in India is estimated to be valued at US $1,303.5 million in 2023, with a CAGR of 13.2%. The drug-eluting stents segment was valued at US $1,846.5 million by 2027, with a CAGR of 14.0%. The ceiling prices of coronary stents have been revised to reflect the Wholesale Price Index (WPI) at 12.1218% for 2022, exclusive of Goods and Services Tax and units specified in the below table, with effect from April 1, 2023.

Hormone Releasing IUD
Hormone Releasing IUDs are contraceptive devices that provide long-term contraception. Price Capping in IUDs can encourage the adoption and usage of Hormone Releasing IUDs, promoting family planning and reducing the risk of unintended pregnancies. It can be part of a broader strategy to improve access to effective and reliable contraception. The Hormone Releasing IUD market in India is poised to grow at a CAGR of 7.42% by 2028, driven by reducing unplanned pregnancies and increasing awareness and usage of IUDs. 1.5% of married Indian women are using intrauterine devices, with 2.54 million women adopting IUDs in the postpartum period. NPPA sets a ceiling price exclusive of goods and services tax for Hormone Releasing IUDs with the dosage form, strength, and unit specified in the below table and with effect from 24th February 2023

Oxygen Concentrators
The oxygen concentrator market in India has seen a surge in demand during the COVID-19 pandemic. The government has capped the trade margin on the price of oxygen concentrators at up to 70%. NPPA issued notifications regarding capping the trade margin of oxygen concentrators at the first point of sale (price to distributor) for the fixation of the maximum retail price. This had been extended up to March 31, 2023, or until further order, The move resulted in a 54% reduction in the MRP of oxygen concentrators without adversely impacting domestic production or disrupting supplies. The revised price is specified in the below table and with effect from 30th June 2023

Trade Margin of Five Medical Devices
Pulse oximeters, blood pressure monitoring machines, nebulizers, digital thermometers, and glucometers are essential medical devices used in the diagnosis, monitoring, and management of various health conditions. These medical devices play a crucial role in both preventive and therapeutic healthcare. NPPA issued notifications regarding capping the trade margin of five medical devices, which had been extended up to March 31, 2023, or until further order, whichever is earlier.

What happens if we don’t follow the price cap?

Non-compliance with price-capping regulations can lead to legal penalties, market exclusion, loss of reputation, increased regulatory scrutiny, and market competition challenges. It is important for manufacturers and suppliers to comply with price-capping regulations to avoid these potential consequences. Compliance ensures fair and equitable pricing, promotes transparency and helps maintain a level playing field.

Conclusion

The government’s price limitations on the above-mentioned medical devices have enhanced accessibility, allowing many patients to be treated at a low cost. With the available data, market information, and statistics, the NPPA decided to place cardiac stents, as an essential drug, under Schedule I of DPCO (Drug Price Control Orders), a part of NLEM (National List of Essential Medicines), and to continue and keep it under price regulation for the benefit of Indian health care. Price capping reflects the government’s commitment to affordable and accessible healthcare, particularly during emergencies, public health crises, or situations of increased demand. It is important to review the specific content of the document to obtain accurate and detailed information on the conclusions drawn by the NPPA regarding the price capping of these medical devices. Get in touch with Morulaa to see how we can collaborate with you to navigate the medical device industry for registration and market entrance.  Contact Morulaa or send us an email at admin@morulaa.com for more details on the new medical device rules.

• Share Post
• Twitter
• Facebook
• Google +1
• Email