Limit on Trade Margins -Medical syringe makers to cut prices soon

New Delhi: In order to make the consumables and medical devices affordable to the patients, manufacturers of disposable syringes have decided to put a ceiling on trade margins at 75 percent after NPPA called a meeting in this matter.

The All India Syringes and Needles Manufacturers Association has issued a circular to its members to print the maximum retail price (MRP) on the basis of a maximum of 75% margin with effect from Consumer Day on December 24th and to implement it latest by January 26 next year.

This time period has been given to allow all the manufacturers to clear the current stock of their packing material with current MRPs for facilitating the smooth transition. The policy move covers all categories of syringes and needles - disposable, auto-disable, reuse prevention, needle stick prevention, insulin pen needle etc.

Communicating the decision, Vimal Khemka, secretary, AISNMA told Mint, "Hailing government's directives to regulate the margins and MRP on syringes to reasonable levels, we have taken immediate cognizance and decided to reduce trade margins to maximum of 75% on ex-factory prices (including GST)."

The decision taken after a meeting between the manufacturers and the National Pharmaceutical Pricing Authority officials where the manufacturers are told to cut down the price of the medical syringe or the government will be forced to act.

Speaking with India Today, a manufacturer on condition of anonymity said, "In the meeting with about 28 syringe manufacturers, the NPPA warned us on imminent action by government if India, our suggestions were sought and market dynamics feedback was also taken."

In a recent statement, NPPA had said companies were charging excessively high prices for drugs and disposables. The issue of overpriced medical consumables got highlighted during the recent Fortis Gurugram incident.

NPPA in its investigation has found that the hospital had overcharged the family of deceased seven-year-old dengue patient for medical consumables and billed them heavily for 1,600 gloves, 660 syringes, and many high-end antibiotics after which NPPA issued a notice seeking copies of the bills from the hospital.

Read also: Hospital Overcharging case: Fortis now gets NPPA notice seeking bill copies

NPPA inquiry into all the medical bills related to the case found several violations by the hospital and 1700 percent margin were charged on medical equipment and drugs.

Read also: 1700 percent on items charged by Fortis Memorial Research Institute, says NPPA

Rajiv Nath, president, AISNMA told TOI,"Hospitals are buying medical devices from those manufacturers who keep high MRP of their products despite low ex-factory prices. This is nothing but profiteering at the cost of patients. This practice is putting a lot of pressure on other manufacturers."

Speaking to Mint, Nath said "While we had been passing on benefits of improved efficiencies in manufacturing as lowered ex-Factory or discounted ex-factory prices, regretfully in most cases, the hospitals were pocketing the advantage and not passing on the benefit to end consumers; so though hospitals could exercise the option of selling below the MRP, very few did."