New Delhi: In a step towards making healthcare equipment more pocket-friendly, a committee under the Union health ministry is working to prepare the first-ever National List of Essential Medical Devices (NLEMD). The ceiling prices for these devices will be fixed under a new pricing policy being formulated by the National Pharmaceutical Pricing Authority, ThePrint has learnt.
“This move is part of the National Medical Device Policy 2023 launched by the government to facilitate the growth of the sector, but also to address the issues of accessibility and affordability,” a senior official in the health ministry told ThePrint.
“There has been a concern that while essential drugs are clearly defined and brought under the ambit of ceiling prices, medical devices are mostly outside the purview and hence there is very little regulation on their pricing,” he added.
Currently, the government’s National List of Essential Medicines (NLEM) in India comprises only four medical devices: cardiac stents, drug-eluting stents, condoms, and intrauterine devices (IUDs). These devices are treated as scheduled drugs, allowing price control measures to be implemented.
Medical devices not listed in the NLEM — including syringes, surgical disposables, and thermometers, among others — are classified as non-scheduled drugs. These devices are permitted an annual price increase of up to 10 per cent. Further, manufacturers are free to determine the pricing of newly launched medical devices in the country.
Top officials in the Union health ministry said that a panel comprising authorities from the health ministry, department of pharmaceuticals, and external experts is now working to develop a separate NLEMD on the lines of the existing NLEM.
ThePrint tried to contact Union health secretary Rajesh Bhushan over the phone for his comment on the development, but did not receive a response. This report will be updated as and when a response is received.
Last year, the parliamentary panel on health and family welfare issued a report titled ‘Medical Devices: Regulation and Control’, in which it called for the inclusion of medical devices used in critical care within the National List of Essential Medicines. They suggested that pricing should be determined based on cost and quality considerations. The report also noted that nearly 80 per cent of the medical devices used in India are imported, and recommended various measures to improve the country’s medical device industry.
Notably, the World Health Organization recognises various “priority medical devices”, ranging from syringes, catheters, and surgical masks to pacemakers and magnetic resonance machines.
Here is a look at how medical devices are currently priced in India, the work being done on the NLEMD list, and how the government’s move could benefit patients.
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How drug pricing works in India
In 2020, the Union Health Ministry redefined all types of medical equipment as “drugs” under the Drugs and Cosmetics Act, to help enforce quality standards.
Prior to 2020, only 23 types of devices which include various kinds of implants, dialysis machines, X-Ray machines, defibrillators, and MRI machines, among others were notified as drugs.
For pricing purposes, drugs are classified in India as ‘scheduled’ and ‘non-scheduled’.
Scheduled drugs are those that are included in the NLEM, with their upper ceiling price fixed every year by the government. Currently, this list includes 384 drugs, among which four medical devices are also counted.
For non-scheduled drugs, manufacturers have the freedom to set launch prices. However, price increases are capped at 10 per cent per year. Non-scheduled drugs account for around 80 per cent of pharmaceutical products sold and marketed in India, according to industry estimates.
Over the last few years, the National Pharmaceutical Pricing Authority (NPPA), a government regulatory agency, has tried to cap the prices of some non-scheduled drugs and medical devices — including 42 anti-cancer medicines, oxygen concentrators, pulse oximeters, and nebulisers— through a trade margin rationalisation (TMR) approach.
TMR involves capping trade margins in the supply chain to ensure lower prices for consumers. The trade margin is the difference between the manufacturer’s selling price to wholesalers or retailers and the maximum retail price charged to patients.
Since 2018, the NPPA has also set ceiling prices for knee implants, despite their exclusion from the NLEM.
There has been a longstanding demand for a price control mechanism for medical devices too, but government authorities have cited various complications and industry pushback as reasons for not implementing it.
New ‘price control formula’ in making
Two committees, one within the health ministry and another in the NPPA, will work simultaneously to develop an effective price control policy for the medical device sector, according to health ministry officials.
“The committee in the health ministry will identify the devices that have to be classified as essential and will be brought under direct price control. The NPPA committee will come up with a price control formula for both scheduled and non-scheduled medical devices,” said the official quoted earlier.
In the case of scheduled drugs, the current formula involves setting the ceiling price as an average of all available brands of a specific formulation in the market.
However, this approach might not be suitable for medical devices. “We feel that this approach may not be directly applicable for medical devices as they are different products altogether and their prices may vary widely,” the official explained.
Therefore, he said, a different approach may be adopted for fixing ceiling prices of scheduled medical devices, while the TMR approach can be considered for non-scheduled medical devices.
What qualifies as an essential medical device?
The move to initiate price regulation on medical devices has been welcomed by patient rights groups. They see it as a positive starting point for addressing the high costs associated with medical equipment, which often contribute significantly to hospital bills.
But out of the plethora of available medical devices, what should come under the first NLEMD?
According to Malini Aisola, co-convenor of the All-India Drug Action Network, an association of NGOs working to increase access to essential medicine, a good starting point for price regulation would be the 23 categories of medical devices that the government defined as “drugs” before 2020.
“An advantage of starting with the original list of the 23 categories of devices is that they have been regulated longer, the market is mature, and there is a better degree of manufacturing self-sufficiency,” she said.
Aisola added that the pricing of these devices has to be done with a view to increasing affordability for patients.
“There is a lot of variability in the products and price points. There is a need for market distortions to be corrected, as was done in the case of stents. This is where the price control will show maximum impact if the government is serious about increasing affordable access,” she added.
Some industry leaders, however, pointed out that unlike drugs it may be difficult to define which medical devices are essential.
“It’s more appropriate to define a priority list of medical devices as done by the WHO. This list can be updated time to time with changes defined by political or healthcare programme priorities such as Covid-19, tuberculosis, anti-microbial resistance, or major communicable and non-communicable diseases,” said Rajiv Nath, forum coordinator of the Association of Medical Device Industry (AIMED).
‘Patients are made to consume high MRP goods’
The high costs borne by patients for the use of medical devices are often the result of hospitals trying to maximise their profits, according to Nath.
“There has so far been no capping on the maximum retail price (MRP) of medical devices from the government other than stents and knee implants. Some private hospitals offer patients the brand of their own free will instead of offering a choice,” he pointed out. “Patients are made to consume high MRP goods instead of low-cost options.”
This, Nath said, has created a market with inflated MRPs for devices.
He added that AIMED has been seeking a non-discriminatory system whereby ethical manufacturers and importers can offer low-priced MRP products and are still able to sell their products.
“We are optimistic that with the introduction of the National Medical Device Policy, prices will hopefully be monitored, and discriminatory practices will be controlled,” he said. “This will help reduce the MRP of any device and the consumer will be able to get products at lower prices.”
(Edited by Asavari Singh)
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