India Proposes New Price Controls on Medical Devices, Drugs

As part of a new pharmaceutical policy proposed by the Indian government, medical device manufacturers could face new price restrictions when selling to public-sector medical institutions. In the new policy, high-price, critical medical devices would come under a differential pricing system, to make them affordable to low-income patients. In addition, manufacturers would be required to engage in price negotiation when selling to any state-run hospitals, retail outlets, or health projects.

These proposals come as part of an overall effort from the Indian government to implement further price controls on the medical industry. Also included in the new proposals are increased price controls for pharmaceutical products. Currently, the government controls the prices of 74 medicines on the National List of Essential Medicines. Under the new policy, that number will grow to 325, with price cuts ranging from 30 to 70 percent.

Critics of the proposed policy say it will do little to lower medical costs for most Indians, and may do more harm than good. The price controls may lead companies to lower their R&D budgets, or avoid entering the Indian market. They may also lead to shortages of these products, increasing incentives for counterfeiting. The safeguards the government puts in place to mitigate its policies’ negative effects will be critical.