NPPA allows manufacturers to hike price of trade margin-rationalized medical devices

This comes in response to the queries from some of the manufacturers and marketing companies regarding implementation of MRP on the medical devices brought under price regulation through Trade Margin Rationalisation approach vide notification dated June 3, 2021 and July 13 2021 due to the withdrawal of GST rate concession for medical devices.

NPPA had earlier capped the trade margins for oximeters, glucometers, BP monitors, nebulizers, and digital thermometers at 70 per cent. The government had directed manufacturers to fix the Maximum Retail Price (MRP) as per the specified formula: Maximum Retail Price = Price to Distributor (PTD) + (PTD x TM) + Applicable GST , Where TM = Trade Margin not exceeding 70%.

Further, it was reported that in light of the extraordinary conditions originating from the Covid-19 pandemic, which resulted in instability in the MRP of the product in the market, NPPA had issued an order on June 3, 2021 that fixed the retail price of oxygen concentrators with a trade margin not exceeding 70%.

Similarly, it had also fixed the trade margin under the Trade Margin Rationalisation (TMR) programme at 70 per cent for pulse oximeter, blood pressure monitoring machine, nebuliser, digital thermometer and glucometer, which are also non-scheduled medical devices, through an order on July 13, 2021, reports The Financial Express.

The Authority issued an order in the backdrop of withdrawal of GST rate concession for these medical devices, following which some of the manufacturers and marketing companies raised queries on its impact on the regulated price.

Subsequently, NPPA issued an office memorandum allowing;

"All the manufacturers and marketing companies may revise the MRP, up to the extent of increase in GST rate, of the medical devices subject to actual payment of GST."

In addition to this, the manufacturers and marketing companies are required to issue a revised price list to all the participants in the supply chain, besides submitting the price list on Form VI to NPPA. These medical devices should be monitored under Para 20 of the DPCO, 2013, it added.

The prices should be revised with reference to the detailed guidelines issued by NPPA on April 13, 2021. The guideline suggests that the manufacturers are responsible to comply with notified prices from date of notification in sale of all available stock including pre-manufactured batches of concerned formulation for which ceiling price or retail price has been fixed or revised by the NPPA.

However, it added that recalling or re-labelling or re-sticker it on the label of container or pack of released stocks in the market prior to the date of notification is not mandatory, if the manufacturers are submitting revised price lists, and are able to ensure price compliance at the retailer level.

To view the official notice, click the link below: