After high-end heart stents and orthopaedic implants, the NPPA has turned to medical consumables after its analysis of the Aadya Singh case, released on December 15 in response to a Right to Information Act application, opened a can of worms. While the mark up on procurement prices of formulations/medicines used to treat Aadya peaked at 914 per cent, the mark up on consumables was much more. For example, a three- way stop cock bivalve was procured by the hospital at Rs 5.77 but billed to the patient at Rs 106.00, a mark up of 1737 per cent.
In a meeting with syringe manufacturers on December 18, the pricing watch dog National Pharmaceutical Pricing Authority (NPPA) advised them to either voluntarily limit trade margins on MRP or it would have to step in to regulate them and cap prices. On December 22, the All India Syringes and Needles Manufacturers Association (AISNMA) announced that it had decided to voluntarily cap trade margins to maximum of 75 per cent on ex-factory prices (including GST) latest by January 26, 2018.
But the blame game continues. Rajiv Nath, President, AISNMA, claims that while manufacturers had been lowering the ex-factory or discounted ex-factory prices as they improved efficiencies in manufacturing, most hospitals did not pass on this benefit to end consumers, i.e. patients and pocketed the advantage. Manufacturers of syringes claim that they work on margins as low as 10 per cent, trying to shift the focus to hospitals.
But while AISNMA’s diktat is appreciated as a first step, will this really make an impact? Or is it merely a savvy populist move? For one, it is facing opposition from within its ranks. Medical Technology Association of India (MTaI), which represents MNC medical device companies, has pointed out that of 26 manufacturers of syringes and needles only 12 companies had confirmed, with one member dissenting and others non confirming. Its argument is that “self-regulation based on decision of a small group is not sustainable”, and hence it is advocating that the government focus on capping trade margins rather than MRP.
Like MTaI, the All India Drug Action Network (AIDAN), a coalition of activist NGOs, also opposes AISNMA’s move to self regulate s it does not guarantee compliance and cannot be enforced. AIDAN has called for the government to first
publish data on the trade margins involved in medical devices and then impose price caps as the only appropriate and sustainable measure to ensure
affordability of these critical devices.
Another attempt to regulate the healthcare sector, the National Medical Commission (NMC) Bill to replace the Medical Council of India (MCI), has also met with opposition. The Alliance of Doctors for Ethical Healthcare (ADEH) say a “technocratic, bureaucratic NMC is no solution to the ailment of the outdated, degenerate Medical Council of India.” Dr KK Aggarwal, National President, IMA is also opposing the NMC Bill finding fault with the composition, the structure, and the fact that it aims to hand over power to administrators.
It is only to be expected that regulation will be resisted, as various segments strive to protect their turfs. 2018 will be about finding a middle path and balancing the interests of the various stakeholders. With the 2019 general elections in view, the Modi government has the opportunity to push through tough regulations citing public, and more specifically patient, interest. Health, rather the cost of health, is definitely going to be a powerful electoral plank in 2019. But when politics and poll promises become the main force behind policies, we end up with short-term gains and most likely, long-term pain.
Our 18th anniversary issue kicks off 2018 with regulators as well as the regulated analysing the fortunes of the healthcare sector over the past three years of Prime Minister Modi’s regime. (See cover: Modi Sarkar ke teen saal: Kya hain desh ke Sehat ka haal?)While policy makers like Anupriya Patel, Minister of State, MoH&FW have listed out the successes, it’s a mixed bag as far as industry is concerned. Will the last fiscal budget of the current administration, due to be presented on February 1, reduce or add to the pain?