Domestic firms volunteer to drop syringe, needle prices over 50 percent


In a move that could bring down the prices of several Indian syringe and needle brands by over 50%, a lobby group of domestic manufacturers has decided to voluntarily reduce the maximum retail prices of these products. The move comes amid rising speculation and debate over whether prices of more medical devices will and should be controlled by the government. 

At the same time, health activists argue that the move will not be effective and government regulation is the only way to ensure affordability and transparency. 

Last Friday, India's drug pricing regulator released information showing Gurugram-based Fortis hospital bought medicines and consumables at rates much lower than what it billed the family of a seven-year-old dengue patient for them. This includes syringes, which were marked up between 600%-1,200%, and needles, which were billed at 150-260% the price the hospital had procured it for. 

Another hospital, Max Super Specialty in Patparganj, was found to be taking margins of up to 527% on syringes in a separate investigation by the country's competition regulator. 

Now, at least 13 members of the All India Syringes and Needles Manufacturers Association (AISNMA) have decided to voluntarily reduce the MRP of their syringes and needles by capping the distributor and retailer margins at 75%. This includes Hindustan Syringes and Medical Devices Ltd (HMD), which allowed margins of as much as 911% to Fortis with its syringe MRPs. 

This could drop prices for these products by 50% in nursing homes and chemists and nearly 70% at hospitals, said AISNMA president Rajiv Nath. Syringes and needles are currently marked up 3-5 times by chemists and nursing homes and up to 10 times by hospitals, according to him. 

The members who have agreed to implement this proposal make up over 80% of the country's domestic syringes and needle market, he added. The body will request multinational syringe and needle makers and importers to similarly regulate their MRPs, he said. 

According to a letter that Nath sent to the body late on Thursday, members are expected to print reduced MRPs on their syringes and needles by January 26, 2018 at the latest. ET has viewed a copy of this letter. 

The move follows a meeting of syringe and needle makers and importers with the National Pharmaceutical Pricing Authority (NPPA) on Monday over MRPs and margins of these products, according to the letter. 

During this meeting, NPPA chairman Bhupendra Singh advised manufacturers to voluntarily regulate prices, "otherwise government would be forced to take steps as they have done to cap prices in the past..." the letter adds. 

The regulator's chairman could not be reached for comment on the details of the meeting held on Monday. 

AISNMA has also taken the decision because of growing allegations that syringe and needle manufacturers are overcharging patients by printing higher MRPs, Nath told ET. 

"Actually, we hardly make 10% margins. Over the years, prices (to distributors and retailers) of syringes and needles have been maintained or have come down. We passed on this benefit to the hospitals as discounts...but this has not reached the consumers," he told ET. 

While the cost of these products has come down for distributors and retailers in the last 30 years, the prices for patients have actually risen by up to three times in the same period, he added. 

It's encouraging to see syringe manufacturers being proactive in offering price reductions, however, self regulation has never been an effective solution and lacks transparency," Malini Aisola, a member of health activist group All India Drug Action Network (AIDAN). 

According to her, government intervention across the range of medical devices classified as 'drugs' under the Drugs and Cosmetics Act, 1947, is the "only" sustainable measure to ensure affordability. 

"On devices which are of critical importance in healthcare, we absolutely need regulation and the industry would be better served in complying with regulations," she said. 

According to an industry executive who did not wish to be named, the domestically manufactured syringes and needles market together is estimated to be around Rs 1,050 crore. 

Medical Device prices came under increasing scrutiny after NPPA slashed prices of life-saving coronary stents and "essential" knee implants by over 75% and up to 69% respectively this year. 

Data by the regulator showed that the prices of these products were marked up as much as 1,000%, shifting attention to the role of distributors and hospitals in the exorbitant prices that patients had to pay for them.