Medical device margins set to be capped at 65% in India
India is set to cap trade margins on medical devices, abandoning the current price control mechanism, as it seeks to curb profiteering as well as allay concerns of device makers, particularly importers of stents and knee implants, who have complained that price caps hurt innovation, two people aware of the matter said.

The trade margin is the difference between the price at which the manufacturers/importers sell to stockists and the price charged to consumers.

The prime minister on Wednesday held a meeting with senior officials of NITI Aayog, the secretary, ministry of health, the secretary, department of pharmaceuticals and chairman of National Pharmaceuticals Pricing Authority to finalise the draft. The Prime Minister is likely to accept government think tank NITI Aayog’s recommendation to cap trade margin at 65% for medical devices, the people said on condition of anonymity.

According to NITI Aayog’s formula, the maximum retail price (MRP) of a device will be decided by adding the trade margin to the price at the first point of sale (stockist).

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