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Policy and regulations

The government wants to make medical devices affordable. But capping trade margins alone isn't a cure.

While the government and the industry fight a pitched battle on price caps, a holistic approach to get a fix on the entire value chain may yield better results.
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anujgupta
12 Sep 2018 7 Mins Read 0 comment
Money Sharma/AFP/Getty Images Getty Images
Money Sharma/AFP/Getty Images
It all started when the National Pharmaceutical Pricing Authority (NPPA) drastically lowered the prices of cardiac stents in February last year. Trade margins were capped at 8%. What followed was a heartache for the medical-devices industry in India and hard lobbying by importers to reverse the government’s “people-centric trade policies”. Referring to a March 2016 report by the Department
against MRP to bring more transparency.” If that is the case, the government should look beyond trade-margin optimisation. A conscious effort should be made to fix the entire value chain and not just its individual components. An ideal value chain will involve sufficient room for innovation, healthy operating margins, an optimised trade channel, and sufficient controls to check profiteering.
It all started when the National Pharmaceutical Pricing Authority (NPPA) drastically lowered the prices of cardiac stents in February last year. Trade margins were capped at 8%. What followed was a heartache for the medical-devices industry in India and hard lobbying by importers to reverse the government’s “people-centric trade policies”. Referring to a March 2016 report by the Department against MRP to bring more transparency.” If that is the case, the government should look beyond trade-margin optimisation. A conscious effort should be made to fix the entire value chain and not just its individual components. An ideal value chain will involve sufficient room for innovation, healthy operating margins, an optimised trade channel, and sufficient controls to check profiteering.

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