India rejects U.S. request on price caps on medical devices - sources

Abbott India

01/05/2018 13:05

* India, United States sparring over medical device price
caps
    * India opposes USTR's demand to stop imposing price
controls
    * U.S. companies irked by India price control since last
year
    * U.S. reviewing trade benefits given to India under a
programme 

    By Aditya Kalra and Neha Dasgupta
    NEW DELHI, May 1 (Reuters) - India has told the United
States it won't abstain from capping prices for more medical
devices, regardless of pressure to rethink its stance after
price controls on heart stents and knee implants spoilt the
market for some U.S. firms, sources familiar with the matter
said.
    India's drug pricing authority is also pushing to bring
three more devices used while treating heart ailments under the
ambit of price controls as they are sometimes more expensive
than the stent itself, showed a government letter reviewed by
Reuters.
    India's $5 billion medical device market has provided rich
fishing grounds for U.S.-based companies like Abbott
Laboratories  ABT.N  and Boston Scientific Corp  BSX.N , but the
prospect of price caps being extended to more products sent
shivers through their ranks.
    In September, the United States Trade Representative (USTR)
wrote to Prime Minister Narendra Modi's office and Trade
Minister Suresh Prabhu urging them "to not expand price controls
to additional medical devices", according to a copy of the
letter seen by Reuters.
    During a meeting last month, Indian officials told USTR
Assistant Trade Representative Mark Linscott that India had
decided against making any such commitment, a trade ministry
official told Reuters on Tuesday.
    "This position will not change, it is within the right of
the government of India (to impose price caps)," said the
official, who declined to be named.
    Linscott "expressed concerns" with India's stance during the
meeting, another Indian trade official said.
    A USTR spokesperson declined to comment for this article,
and Modi's office did not respond to Reuters' queries.
    Price controls form part of Modi's broader agenda to improve
India's dilapidated public health system and boost affordability
of treatment.
    Equating high trade margins on some medical devices with
"illegal profiteering", the government last year capped prices
of some high-end heart stents - small wire-mesh structures used
to treat blocked arteries - at around $450, compared to $3,000
charged earlier.
    During a visit to Britain last month, Modi himself extolled
the price caps' success in making treatment much more affordable
for Indians. 
    And India's National Pharmaceutical Pricing Authority (NPPA)
has been pushing for more price controls.
    The regulator wrote to the health ministry on Feb. 26,
asking for three other devices used to treat heart ailments -
cardiac balloons, catheters and guide-wire - to be added to a
list of products eligible for price controls.
    In the letter, the NPPA described the prices charged for
these products as "exorbitant", and said companies involved in
bringing them to the market were enjoying high trade margins.
    "Because of these exorbitant prices of catheter and balloon,
which are many times higher than the stent price itself, the
objective of price capping of stents gets diluted," the NPPA
said in its letter.
    The NPPA also said intraocular lenses, which are used during
eye surgery, should be brought under the list.
    A senior health ministry official told Reuters that the 
NPPA's requests merited "consideration".
    The medical device manufacturers argue that India's price
control mechanism hurts innovation, profits and future
investment, and the USTR described India's policy as "very
troubling".  urn:newsml:reuters.com:*:nL3N1JD3MY
    Indian trade officials anticipate coming under more pressure
from the United States.
    The USTR is currently reviewing India's eligibility under
its Generalized System of Preferences (GSP), a programme that
allows duty-free imports of certain goods. India was the largest
GSP beneficiary at $5.6 billion, the USTR said in April.
 urn:newsml:reuters.com:*:nL1N1RP1WX
    Bilateral trade rose to $115 billion in 2016, but the United
States wants to reduce its $31 billion deficit with India, and
is pressing New Delhi to ease trade barriers.

 (Reporting by Aditya Kalra and Neha Dasgupta; Editing by Simon
Cameron-Moore and Christopher Cushing)
 ((aditya.kalra@thomsonreuters.com; +91-011-49548021; Reuters
Messaging: aditya.kalra.thomsonreuters.com@reuters.net (Twitter:
@adityakalra))