The central drugs regulator on Thursday issued an order to the medical device manufacturers giving a three-month window to the industry to sticker their inventory with the revised retail sale price (MRP) that will reflect the reduced goods & services tax (GST) rates. The order covers both importers and manufacturers of class C and D medical devices.
Class C and D medical devices are categorised as moderate-high risk and high-risk devices, respectively, that include products like bone fixation implants, diagnostic equipment like CT scan and MRI machines, pacemakers, defibrillators and implantable stents. The order has also directed the state drugs controller to expedite the process of issuing no-objection certificates to manufacturers to alter the labels (stickers).
On September 3, the government reduced GST rates on medical devices from 12% to 5%. The Central Drugs Standard Control Organisation (CDSCO) order comes close on the heels of a circular issued by Department of Consumer Affairs (DoCA) on September 9 permitting manufacturers to declare the revised MRP on the unsold stock manufactured/imported prior to the revision of GST, after including the applicable tax rates, up to December 31 or till the old stock has been exhausted. The DoCA also insists that the manufacturers should issue advertisements on the revised prices.
Logistics and challenges of implementation
Though the industry players said that both the advertising and the stickering are not feasible. “There are small- and medium-sized companies producing a large number of SKUs (stock keeping units). It will not be practical for them to advertise the revised prices for each of their product. At the chemist level also, it’s not possible to put posters on product-specific price revisions,” said a large domestic device maker.
Industry’s pushback and alternative solutions
Rajiv Nath, forum coordinator at Association of Indian Medical Device Industry (AiMeD) said that it will be disruptive to recall the inventory for stickering of revised MRP. “The CDSCO circular does not resolve our issues and challenges to revise MRP by stickers on billions of inventory of medical products in the supply chain. We have sought exemption from the need to sticker lowered MRP on medical devices. Instead, the manufacturers can communicate the reduced MRP to consumers through their websites,” he said.
Meanwhile, the National Pharmaceutical Pricing Authority (NPPA) is working on the guidelines for the implementation of the revised GST rates for pharma and MedTech sector. It will likely issue these guidelines issued by early next week, as per official sources.
