AiMeD lauds Delhi govt’s anticipated MedTech price capping move

The Association of Indian Medical Device Industry (AiMeD) has applauded the steps taken by Delhi government and the advisory given by IMA to consider capping of profit margin to 50% over the procurement cost of a hospital

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New Delhi: The Association of Indian Medical Device Industry (AiMeD) in its statement issued on 9th May applauded the Delhi Government’s proposed move to cap the profit margin of medical products.

Mr Rajiv Nath, Forum Coordinator of AiMeD said, “We applaud the steps taken by Delhi government and the advisory given by IMA to consider capping of profit margin to 50 percent over the procurement cost of a hospital.”

A nine-member committee was set up five months ago to suggest the scope of profit margins on medicines and consumables. The committee comprised of members of Delhi Medical Council, Indian Medical Association and some bureaucrats in the health department. It is also reported that Delhi government will issue a policy based on the recommendation of the committee in next few days.

The panel is said to have suggested capping of the profit margin for drugs and devices at a maximum of 50 percent above the procurement cost or the manufacturers (MRP) price, whichever was lower.

“This will result in consumers access to medical devices at prices below inflated MRP. If this happens game over to artificially keep MRP at exhorbitant levels by any of us manufacturers and importers as an inducement to push medical devices sales to hospitals,” said Mr Nath.

“Of course, lobbying forces for high priced medical devices suppliers will be worried as they will loose the competitive advantage of inducing procurement bodies based on higher margins as the cap becomes a leveller. This will bring back the focus to cost reduction and operational efficiencies by hospitals to remain competitive and profitable,” mentioned the AiMeD statement.

“Let’s hope other State Health Ministers follow this lead by Delhi Govt and NPPA and DoP consider this as a possible reform in the regulations for Price Controls of Medical Devices,” concluded Mr Nath.