Update on India’s Plan to Cap Prices of Medical Devices

As reported in a previous news brief, the Indian government has grown closer towards implementing price controls of critical medical devices in an attempt to lower healthcare costs. Due to limited domestic device manufacturing, India currently imports over three quarters of its high-end medical devices, a majority of which come from the U.S. and Germany.

Under the Indian government’s proposed Central Government Health Scheme (CGHS), prices for imported medical devices, such as stents and implants, could be more than halved. Reportedly, the Indian government intends to reduce the premium on devices by implementing a price control for medical devices that is similar to the previously implemented price cap for 343 essential pharmaceuticals. Prices for medical devices under the CGHS are predicted to be 40% to 70% lower than market prices.

In the past, price controls have helped India’s domestic pharmaceutical industry to become a major exporter of generic drugs. The government hopes that these new device price controls, in conjunction with manufacturing incentives such as preferential tax policies, will not only lower healthcare costs, but also reduce India’s reliance on imported medical devices and bolster the country’s domestic medical device manufacturing.