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States capping prices of essential COVID commodities will lead to supply constraints

Posted on June 12, 2021

On June 4, 2021, the government of Tamil Nadu announced the MRP setting of 15 essential COVID medical products, including hand sanitizers, PPE kits, N95 masks and surgical gowns. This is similar to the orders issued by the government of Kerala in May and by the government of Maharashtra last year.

This is, while India already has a national medical device price regulator under the NPPA, which has issued several opinions from time to time to address issues of interests and priorities. national. (The last was when he saw the profits made on the sale of oxygen concentrators and capped the margins to cut prices).

Pavan Choudary, President and CEO, MTaI, said, “We are at a critical time in the fight against COVID and government and industry are trying to come together to overcome this situation. At such a time, decisions made without consulting industry will be confusing. Kerala, Tamil Nadu and Maharashtra have fixed prices at different points, which can create a risk that products are sold at multiple price points across the country. This will cause additional costs and logistical challenges for businesses due to relabelling and could disrupt the availability of these essential products. Companies may also choose not to market the product in the territory where the costs and complexities outweigh the benefits.

“The points at which prices have been capped seem irrationally low, which may make this market unsustainable for the industry. Another concern is that this can deprive frontline healthcare workers of access to good quality protection compromising their safety, ”said Mr. Choudary.

“Some experts believed that theoretically not only state governments, but district magistrates also have the power to regulate prices. If such adventurous pricing is allowed in practice, the industry will have to prepare for a time when price control will also occur at the district level! Our vision of attracting domestic and foreign capital to invest in medical devices will collapse, as will the interest of patients. Price control decisions, when unavoidable, should be made by a single body for which India already has the NPPA, which has the research and implementation capacity to do this job thoroughly. We look forward to a rapid intervention by the authorities concerned to restrict State intervention in price controls, ”added Mr. Choudary.