Government caps prices of medical devices | Fusion - WeRIndia

Government caps prices of medical devices

Government caps prices of medical devices

Many medical devices like pulse oximeter, nebulizer etc. have become essential due to COVID-19.

To enable medical devices affordable to common people during the pandemic, the government capped the prices of certain medical devices. These devices are a pulse oximeter, digital thermometer, blood pressure machine, glucometer, and nebulizer.

The National Pharmaceuticals Pricing Authority (NPPA) put a cap on the prices of these devices, exercising its extraordinary powers under Paragraph 19 of DPCO, 2013.

Earlier, the government capped the prices of oxygen concentrators at 70 per cent using the same powers.

NPPA is allowed to regulate the prices of drugs that are not under the NLEM (National List of Essential Medicines) as per Paragraph 19 of DPCO, 2013, under extraordinary conditions in the public interest.

NPPA tweeted on Tuesday, stating that the trade margins are capped at 70% at a distributor. That means the prices of these devices cannot exceed the profit of more than 70% of the distributor’s price. Currently, they are being sold up to 709% profit.

Here is the calculation of prices of these medical devices as per the new rule:

Price to Distributor plus 70% of the price to Distributor. GST is added to this price to get the total price.

For instance, if an oximeter to distributor costs ₹500, then the maximum retail price (MRP) will be calculated as follows:

500+ (70×500)/100 + (5×500)/100 = ₹875.

That means the oximeter cannot be sold beyond the specified price, i.e., ₹875.

The cap on these devices will be applicable till January 31, 2022. NPPA ordered the sellers to revise the MRP of these devices as per the new rule by July 20.

Those who do not revise the MRP by the given time will have to pay a 100% penalty of overcharged amount along with 15% interest.

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