AIMED terms latest MedTech preferential market access policy as disappointing

The Association of Indian Medical Device Industry has said that by denying preferential pricing to Indian manufacturers, the draft policy guidelines can be said to be bordering on encouraging, what it called, pseudo manufacturing

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New Delhi: Mr Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AIMED) has expressed deep disappointment over the draft medical devices Preferential Market Access (PMA) policy issued by Department of Pharmaceuticals (DoP).

“We are disappointed with the draft of PMA policy issued by DoP. We will study it collectively and respond shortly but it is a clear case of a lost opportunity to promote indigenous manufacturing of medical devices to boost ‘Make in India’ initiative,” Mr Nath said.

As per the AIMED, the draft PMA policy in its present form does not provide Preferential Pricing to Indian manufacturers, no incentives on maintaining and improving quality, indigenous development and no redressal/penal provisions against use of exclusionary 3rd country regulatory approval mandatory clauses e.g. US FDA.

“It doesn’t provide for any corpus for ensuring no late payments by Government. Such a corpus would be necessary to ward of any adverse impact on financials of a company in case of delayed payments by the Government,” Mr Nath said.

While Mr Nath added that they are yet to study the Draft PMA in detail and take a stand but regretted to note that the suggestions made by us to give encouragement and boost manufacturers producing in India over imports have not been considered. Those include the preferential pricing for domestic manufacturers based on World Bank norms; Preference for ICMED/ ISO certified manufacturers to boost quality; Preference for design India certified manufacturers to boost indigenous development; timely payment against government supplies. Penal provision against Hospitals that keep exclusionary compliance Clause of USFDA Certification as 3rd Country Regulatory approval.

“The Prime Minister wants to boosts Make in India with Buy in India and DIPP provided a Preferential Purchase order with a 20% margin of preference for domestic manufacturers however this margin of preference is not preferential pricing of 20% as is case in some countries like China which we are informed gives 15-25% price preference and others like Malaysia, Jordan, Uganda, Indonesia etc give 15% but DIPP Order only allows Indian bidders to match the L1 Lowest price bid of a foreign manufacturer (Read Chinese) if his bid was within 20% Range . The whole intention of Prime Minister and of amending GFR 153 got diluted, we wonder if he’s aware of this?,” he asked.

“We can match prices of any country other than China as it has no global market economies but a subsidized state sponsored eco system. How can we compete with low priced imports from china with non- remunerative, non- sustainable pricing unless Indian Govt. has supportive Policies,” Mr Nath asked insisting India needs to follow the UN system of procurement based on sustainable costs and not based on L1 Lowest pricing that motivates some manufacturers to cut corners in regard to quality and service delivery of product and give poor image to Brand India.

The Association of Indian Medical Device Industry has said that by denying preferential pricing to Indian manufacturers, the draft policy guidelines can be said to be bordering on encouraging, what it called, pseudo manufacturing. “It is sad that genuine concerns and suggestions of Domestic Medical Device Manufacturers are being repeatedly sidelined,” read the strongly worded statement.

India is import dependent on Medical Devices at over 70 -90% for its needs and has an import bill of over 27,500 Cr Rs. The Indian manufacturers via AiMeD have been highlighting the need for India to address this import dependency as they are many time unable to win public healthcare tenders and loose out to lower-priced imports especially from China due to low tariff protection with import duty in most cases a maximum of 7.5% or they lose out to American competition for Tenders where Bid specifies USFDA approval as a mandatory qualification required.

The Department of Pharmaceuticals on 16th March 2018 posted guidelines for implementation of Public Procurement Order in respect of Medical Device sector. As per AIMeD, while the tenders below Rs 50 Lakh have been addressed, there is no clarity for tenders above Rs 50 Lakh which are open for International bids.

The health ministry in its recently stated Health Policy stated in clause 13.11 “ towards furthering Make in India, the private domestic manufacturing firms /industry could be engaged to provide customized indigenous medical devices in the health sector and in creation of forward and backward linkages for medical devices production. The policy also seeks assured purchase by Government health facilities from domestic manufacturers, subject to quality standards being met.” Similarly clause 13.13 talks about incentivizing Private Sector in proposed strategic purchase by Government .Clause 18 advocates the need to incentivize local manufacturing considering the over 70% import dependency.