Govt's public procurement directive to states may restrict competition: MTaI

Government's directive to states to prefer domestically manufactured medical devices for public procurement could lead to restricting of competition, industry body Medical Technology Association of India (MTaI) has said.

The timing of the directive, issued this month, is surprising as the industry is actively discussing the means to streamline public procurement of medical devices without disturbing the demand-supply equation, MTaI said in a statement.

"The central government's directive to states to prefer indigenously manufactured medical devices for public procurement may end up restricting competition rather than creating a level-playing field," it added.

It is noteworthy that more than 70 per cent of the demand for medical devices is being met by global companies with a large footprint of investment in manufacturing, research and development and training of healthcare workers in India, the statement said.

These companies operate in multiple countries and therefore adhere to international standards such as USFDA or CE that are recognised in India as well as all other nations, it added.

The recent directive seems to have ignored these facts in asking states to prefer Indian drug regulatory certification for public procurement, the statement said.

Earlier in 2018, the Central Government had issued draft guidelines for public procurement, stipulating that medical devices should have a minimum local content of 25-50 per cent to qualify for public procurement, it added.

At present, India has got adequate manufacturing capabilities for products like syringes, cannulae, stop cocks, dressings, hospital furniture, etc but lacks the desired ecosystem for devices like heart lung machines, pacemakers, complex catheters among others, the statement said.

"The definition of local content in public procurement tenders need to be reworked. Keeping the wide spectrum of products in the medical device sector in mind as well as staying mindful of the fact that no large company makes its entire range in one destination, a company that's making any part of this wide range of products in significant volume should be considered as domestic manufacturer," MTaI Chairman and DG Pavan Choudary said.

While Department of Pharmaceuticals is taking an inclusive approach to understand the concerns of all stakeholders in the industry, measures such as the recent directive on public procurement seems to ignore the concerns of global companies, which are the largest stakeholder at present, he added.

FDI in medical devices had dipped to USD 66 million in 2018 from USD 439 million in 2016, the statement said.

"MTaI has been engaging with the Department of Pharmaceuticals and the Invest India team closely to work on several corrective measures which will help bring FDI back on track and promote investments in the medical device sector," Choudary said.

This is a capital intensive and technology intensive sector which is why for the growth of this sector, the participation of western countries and countries like Japan and Korea is vital, he added.