The Indian government is probing a complaint that a Chinese manufacturer is exploiting a loophole in essential medicine pricing rules to undermine government바카라s efforts to cap prices of cardiac stents.
Sources in the industry and the government confirmed to Outlook that Chinese stent manufacturer MicroPort, which entered India after price control regime was put in place, is being probed for registering its Indian distributors as importers or manufacturers. By knocking off a cog in the supply chain, the company increased its margins and its ability to pay higher kickbacks to doctors than multinationals or Indian companies that are restricted by price cap.
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Law prohibits a manufacturer or importer from doubling up as a distributor to prevent unfair trade advantage.
National Pharmaceutical Pricing Authority (NPPA), India바카라s drug pricing regulator, has been facing an onslaught from stents manufacturers, mainly multinational companies, after it passed an order in February capping the price of stents. They created an artificial shortage of high-end drug eluting stents as well as trying to withdraw such stents citing business non viability.
The NPPA바카라s order for price control restricted trade margins for manufacturers/importers at 8% for of cardiac stents. The margin for distributors is 8% according to the rules. While the MNCs were fighting the government, the Chinese company tiptoed into market and registered all their distributors in India as importers to increase the margins available to them for distribution.
According to government sources, a complaint has been registered in the regard. 바카라The company seems to have found a loophole of sorts in the DPCO order,바카라 says an official in the NPPA who wishes to remain unnamed.
바카라We are looking into the matter and if the allegations are true, strict action will be taken against them.바카라
The company바카라s ability to increase trade margins by skipping a step in the distribution chain has enabled them to entice doctors and hospitals with higher margins. More and more doctors are recommending Chinese stents to their patients, a fact spotlighted by the jump in their market share.
Probir Das, the managing director of Terumo, a multinational stent manufacturing company, said, 바카라In a matter of just three months, Chinese companies have managed to disrupt the way the stent market in India functions and have already increased their market shares by 7-8%.바카라
The efficacy of such stents is also questionable since they do not have the approval of the U.S. Food and Drug Administration.
Mircoport has not yet replied to Outlook바카라s request for comments.
Multinational companies say that they are the worst hit by the price control regime because bringing all drug eluting stents under one umbrella severely restricts innovation.
바카라The restricting cap on prices is a deterrent in two ways to multinationals, said Das. 바카라Such companies will not introduce new technology of any kind to India in the future. Further, the companies will also wish to withdraw the present high end stents present in the market like in the case of Abbot and Medtronic바카라s,바카라 he said.
Bhupendra Singh, the Chairman of NPPA, has said the information submitted by all companies show an average trade margin of 8% is financially viable for stent manufacturers.
바카라We have been fair in the devising of prices and have kept in mind the needs of the companies. There exists a clause in the DPCO,바카라 according to Singh, 바카라where if a company claims superiority in product and can back it up with published and reliable data; it can apply for differential pricing. No company has come forward to apply for such differentiated pricing.바카라
Indian companies too faced the brunt of price control but not as much as the multinationals. An Indian stent manufacturer, said the move has given Indian companies a chance to adopt new models of marketing.
바카라While profit margins may be restricted, with a cap on prices patient affordability has increased and more patients can afford the procedure. We make our stents readily available to all hospitals which ask for them and are thus able to achieve sales despite very low margins. However, our ability to do R&D for newer technologies is definitely restricted,바카라 he said.
