New Delhi: As per the Medical Technology Association of India (MTaI), the broad-brush criteria for public procurement will cause proliferation of manufacturing of low-quality products in India while high-quality components retain their axis abroad.
At present, India has got adequate manufacturing capabilities for products like syringes, cannulae, stop cocks, extension lines, blood bags, dressings, hospital furniture, and suction machines, but lacks the desired ecosystem for devices like heart lung machines, pacemakers, complex catheters, etc., the Association has stated.
“Unlike several other sectors, medical devices are comprised of thousands of very varied products in engineering and design complexity. A uniform 25-50% local content ask, preceding any meaningful scaling up of the missing sophisticated component ecosystem will create a risk of ‘garage manufacturing’ with low cost – low quality Chinese knocked-down kits based assembly.” MTaI Director Mr Probir Das said at a press conference held in New Dlehi.
“This is compounded by the fact that India’s medical devices regulatory regime is new, the rules and their implementation is nascent, and the country’s materio-vigilance programme will take time to scale up. Any preferential provisions for public procurement at this stage must only be limited to products where India has existing manufacturing capacity. The capacity should be validated by credible third parties like PWC & KPMG,” he added.
MTaI Chairman and Director General Mr Pavan Choudary said MTaI members applaud the government’s Ayushman Bharat initiative and are committed to support all initiatives that ensure growth of the sector.
“But somewhere there is an over-simplification of a complex problem. Measures like price capping and preferential market access without taking into account the complexity of the sector are going to create obstacles in the realization of ‘Make in India’ goal,” Mr Choudary said. “This year the FDI in medical devices was clearly pipped to cross USD 1 billion, thanks to this government’s move of bringing it on the automatic route. However, it has dipped to just USD 184 million. Why did the FDI lose it trajectory of growth is what the government should ask,” He added. (See attached enclosure)
Mr Das said, “It has clearly been evidenced that the arbitrary price control mechanism has created uncertainty among global MedTech majors about India. This weakening sentiment is certainly counterproductive to Make in India. Also, the growth of the high quality, organized private hospital segment in India was on the back of the availability of globally the best/innovative products. If the same products exit India, there will certainly be a shrinkage of the organized private sector healthcare. This will have a detrimental effect on the market size, and thus on Make in India.”
MTaI Director Mr Sanjay Bhutani said that trade margins should be rationalized on the basis of price to trade in case of imported products and price to a distributor in case of locally manufactured products. “Different medical devices have different market adoption investment requirements (e.g. a hypodermic syringe may not have the same physician training investment needs as a trans-catheter heart valve). Therefore, different marketers require different levels of profitability that is both fair and logical. Hence, TMR should be based on Price to Trade, which takes into account investments in training, localisation R&D, government taxes and surcharges.”
