Syringes, needles to become cheaper as manufacturers cap trade margins at 75%

Price of syringes and needles is likely to come down sharply as manufacturers have decided to cap trade margins at 75 percent after the country’s drug price watchdog asked companies to regulate prices, reported Mint.

“Hailing government’s directives to regulate the margins and MRP on syringes to reasonable levels, we have taken immediate cognizance and decided to reduce trade margins to a maximum of 75 percent on ex-factory prices (including GST)”, Vimal Khemka, Secretary, AISNMA told the paper.

The All India Syringes and Needles Manufacturers Association (AISNMA) on Thursday asked members to consider printing reduced MRP from December 24 and implement it by latest 26 January.

During this period, the manufacturers will be able to clear all their existing stocks.

“This period is to allow all manufacturers to clear current stock of their packing material with current MRPs and enable smooth transition,” an AISNMA circular to the manufacturers said.

The move comes after the National Pharmaceutical Pricing Authority (NPPA) noted the companies were charging excessively high prices for drugs and disposables.

“The NPPA advised manufacturers to consider regulating price themselves; otherwise, the government would be forced to take steps as they have done to cap prices in the past for items like stents and orthopaedic implants,” a person aware of the matter told the paper on condition of anonymity.

Also Read: Fortis overcharged dengue patient's family as high as 1700%: NPPA

In September, the NPPA found that Fortis hospital at Gurugram charged as high as 1,700 percent margin on consumables and medicines used for the treatment of a seven-year-old dengue patient who subsequently died of the illness.

The drug price regulator had asked Fortis to provide copies of bills in relation to allegations.

“While we had been passing on benefits of improved efficiencies in manufacturing as lowered ex-Factory or discounted ex-factory prices, regretfully in most cases, the hospitals were pocketing the advantage and not passing on the benefit to end consumers; so though hospitals could exercise the option of selling below the MRP, very few did,” Rajiv Nath, president, AISNMA told Mint.

The regulator has been imposing price controls on various medical equipment including stents, drug formulations. On Monday, NPPA called another meeting to discuss MRP and margins, specifically in disposables, syringes and needles.

Also Read: Pharma department moves to wrestle NPPA’s special powers to cap drug prices

The Department of Pharmaceuticals in October has also held talks with stakeholders regarding the availability of medicines and prices if trade margins were to be capped.

The AISNMA on Thursday also requested multinational companies to self-regulate their MRP based on the ex-factory or import-landed prices.

“Hospitals are buying medical devices from those manufacturers who keep high MRP of their products despite low ex-factory prices. This is nothing but profiteering at the cost of patients. This practice is putting a lot of pressure on other manufacturers,” Nath said.