US medical device makers call for trade action against India
American medical device companies have written to the US government asking that it suspend or partly or fully withdraw India's benefits under the Generalized System of Preferences (GSP) "in view of its failure to provide equitable and reasonable access to its market for medical devices". GSP allows developing countries duty-free access to the US for some products.
The companies cited recently imposed price controls on stents and knee implants as examples of discrimination against US device companies.
The representation to the United States Trade Representative (USTR) was made by Advamed (Advanced Medical Technology Association), a trade association representing nearly 350 medical technology companies including the biggest stent manufacturers, Abbott, Boston Scientific and Medtronic.
Advamed's representation to USTR comes while the annual GSP product and country practices review process in underway. Under GSP, 3,500 product lines are eligible for the benefits of duty-free access to US markets. These products include engineering goods such as mechanical and electrical machinery and equipment, tools, agricultural implements, organic and inorganic chemicals, plastic and copper.
The Drug Price Control Order, under which India regulates the prices of drugs and devices, discriminates in favour of drugs and devices developed and produced in India and the department of pharmaceuticals also has the mission of promoting the growth of domestic drug and device industries and reducing imports, stated Advamed to back its charge that it was facing discrimination in access to Indian markets. Advamed claimed that NPPA's price cap of stents "disproportionately harmed imported stents".
Referring to the price control of knee implants following stent price caps, the association expressed apprehension that price control could extend to other medical devices. AdvaMed stated that it recently learned that NPPA has already calculated ceiling prices for a number of other medical devices and was just waiting for the prime minister's order. "If price controls extend to all US exports of medical devices, except capital equipment and in vitro diagnostics (because neither category has ever been mention as candidates for price controls), over $700 million of US exports could be adversely affected," it added.
Interestingly, Advamed claimed that the order capping knee implant prices came "despite repeated assurance by GOI officials that they would not expand price controls beyond stents".
The National Pharmaceutical Pricing Authority had capped stent and knee implant prices after studies by it revealed huge trade margins being used to induce hospitals and doctors to use these devices at exorbitant prices to patients.
Avamed feared that other countries might attempt similar price controls. "Indonesia, Bangladesh and Pakistan are reportedly considering India-type price controls. Even more troubling, China recently published a national pricing policy, in which it explicitly required manufactures to report prices in India," it stated.
The Association of Indian Medical Device Industry (AIMED) countered Advamed's claims by pointing out that the US adopted policies to favour its own companies. "The US has technical barriers to trade under USFDA, while these are near non-existent in India for US device companies. Indian manufacturers are barred from selling to the US government-funded health programmes and defence as India is not listed under the US Trade Agreement Act. We are also discriminated against as the US has a 'Buy American' policy. No such government support exists in India for domestic manufacturers. These lobbying forces only care about access to Indian markets. Most of them just import. Hardly any of them manufacture in India," said Rajiv Nath of AIMED. He added that Advamed's representation showed the true nature of the foreign device companies, who were members of the Confederation of Indian Industries (CII) and Federation of Indian Chambers of Commerce & Industry (FICCI) but were hardly interested in the welfare of India or its industry.