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 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 and Boston
Scientific Corp, 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.
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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".
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 program that allows
duty-free imports of certain goods. India was the largest GSP
beneficiary at $5.6 billion, the USTR said in April.
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)
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