The Association of Indian Medical Devices Industry (AiMeD) notes that the focus on excessive trade margins has now moved to Uttar Pradesh. An inspection of 214 pharmacies attached to medical colleges and private hospitals found gaps of up to 67 times between purchase price and MRP. The widest was on a Polymyxin-B injection, bought at ₹74.09 and carrying an MRP of ₹4,980.94 (as reported by Hindustan Times).

Medical devices must not be overshadowed by pharma

Public debate on trade margins tends to centre on drugs, and medical devices get overshadowed. The same inspection showed that devices also carry wide gaps. A three-way stop cock was purchased for ₹6.40 against an MRP of ₹163, more than 25 times the purchase price. Devices are used in every ward and procedure, so their pricing needs equal attention to be Fair Pricing in any policy response.

Rajiv Nath, Forum Coordinator, AiMeD, said: “After Maharashtra and Karnataka, the spotlight is now on UP. But the problem is nationwide. The wound has been festering for a long time and needs surgery. Medical devices must not be overshadowed by pharma in this discussion. Policy action on AiMeD’s recommendations on pilots for trade markup capping are still awaited.”

The lesson from COVID

During COVID, price gouging of products such as masks was rampant, and the central regulator was slow to act. Maharashtra, Kerala and then Tamil Nadu stepped in on their own and capped trade margins at unrealistically low levels, based on public procurement tender prices. This was harmful. It caused shortages and limited supply-chain access for manufacturing units in those states and neighbouring areas. The markups were too low to cover logistics, multiple changes of hands and inventory management at distant supply points.

AiMeD’s position

• The key word is Rationalised trade markup. Not 67 times, not 25 times, but a workable band of 2 to 6 times. Most consumables that leave factory at less than 1000 Rs can have maximum trade mark up of 4 Times on imports landed prices and domestic ex factory prices to derive a Fair Price at retail level .
• Policy should not swing from extreme excess to inadequately low margins, which would again cause shortages and strain consumer access.
• Rationalised markup should be tested through pilots first. Executing a proposed strategy as a pilot is policy making by evidence.
• The pilots should be uniform and national in design, avoiding state-by-state caps that fragment the market.
  Mr Nath added: “We hope this time the policy review and enforcement is pragmatic. Consumers must be protected from gouging, and manufacturers and distributors must be able to serve every part of the country.”

About AiMeD: The Association of Indian Medical Devices Industry represents domestic manufacturers of medical devices and advocates a predictable, evidence-based policy framework for the sector.