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Capping Prices of Face Masks- Maharashtra May Witness Severe Surgical Mask shortage crisis

“To avoid the crisis of masks shortage post Maharashtra Govt’s notification capping prices of face masks & to stop sub-standard & inferior quality masks flooding the market, ensuring high quality safe products reach the last mile

“To avoid the crisis of masks shortage post Maharashtra Govt’s notification capping prices of face masks & to stop sub-standard & inferior quality masks flooding the market, ensuring high quality safe products reach the last mile rural interiors, Mr. Rajiv Nath, Forum Coordinator, AiMeD in a meeting with the Maharashtra Govt requested for rational pricing & amendment of the notification ‘NO 2020/SI.No. 306/Aarogaya 5’ capping prices of face masks.”

”We are glad Maharashtra Govt. took the initiative to protect consumers by bringing in price caps after removal of price caps by the Central Govt. on Surgical Mask. The Maharashtra government’s intentions are good, as they seek to protect consumers and give them access to reasonably priced masks of standard and high quality. However, the mask prices that have been fixed need to be rational or good quality manufacturers will focus on sales in states other than Maharashtra.” Stated Mr. Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD)

“The intention of regulations needs to be to discipline errant manufacturers & traders not to go overboard in creating a scenario whereby supply chains get disrupted creating shortages of standard quality goods leaving underfed markets to be exploited with sub standard low priced goods, resulting in more regulations. Now retailers will stop stocking Surgical & N95 Masks which provide higher protection against transmission of COVID-19 and instead push sales of reusable cotton mask which will have higher trade margin for them but provide less protection to public”, explained Mr. Nath.

“Simple solution for masks is to keep price caps rational at 2-3 times of ex factory price – as for critical medical device to end profiteering not profits and for other medical devices to keep MRP at 2-4 times of ex factory / import landed price to end prevailing MRP of over 10-20 times of imports landed / ex factory price” Suggested Mr. Nath.

Manufacturers/ distributors / resellers may be asked to carry MRP data on invoice – both as – transaction value & MRP, so that trade margin details can be transparently evident enabling consumer protection” AiMeD stated in a letter to Maharashtra Govt.

Seek equivalence/ compliance of BIS Standards for minimal product acceptance and not 2 quality norms of an overseas American Standard like NiOSH to be over and above BIS Standard for regulatory purposes. Any manufacturer is free to aspire to make products to specific higher international Standards to prove quality on a voluntary basis but Indian regulators may not use these overseas Standards to define or limit access to Indian market if BIS Standards are available.

Mr. Nath discussed with the Maharashtra Govt. that the current 15% Manufacturing margin, 20% Retailer margin and 8% dealer  margin provided by the Maharashtra Govt., if it’s net profit and only one dealer is involved in supply chain then it’s workable but seemingly Maharashtra Govt. has kept it as gross margin and not net margin and not kept provision of transportation, inventory carrying cost, credits sale cost, sales promotion costs etc at the distribution supply chain level and neither kept provision of 2-4 change of hands of distribution in supply chain within Maharashtra & 3-5 change of hands from outside of Maharashtra as large Manufacturers will possibly sell to a consignee agent, onto an area distributor, onto a dealer, onto a wholesaler / stockist & onto a retailer & then consumer / user .

The  current DPCO defines only retailer margin & stockist margin but not of Manufacturer or of Consignee agent, or distributor or dealer so it only controls the trade margin at tail end of drug distribution but not entire supply chain for scheduled drugs.

“Our formula of 2-3 times covers whole supply chain from ex factory to retail and as price goes down by competition it will reflect in lower MRP too (including of GST), if both the MRP and transaction cost being invoiced is available on invoice as being done in Kerala, then there’s transparency; Maharashtra Govt’s MRP Cap excludes GST and keeps it extra.” Added Mr. Nath.

We are also writing to NPPA to consider our long standing request to cap MRP of all types of masks so that individual states need not seek price capping as if this is done by oversight at irrational levels it may deny access to standard quality product and defeats its very purpose.

“The Indian Medical Device manufacturers are more than hopeful that Maharashtra Govt. will look into the mask issue & take corrective action to provide rational pricing and help them manufacture high quality safe products which reach the last mile rural interiors.” Concluded Mr. Nath.

pandey.satish056@gmail.com

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