Medical device makers push 'fair pricing' model amid MRP concerns

Medical device makers have urged a shift to a fair pricing model amid concerns over inflated MRPs, even as stakeholders remain divided on pricing practices in healthcare

India’s medical device industry has stepped up calls for a shift in pricing policy, even as consumer groups and trade representatives remain divided on where the problem lies—whether in opaque MRPs or in hospital billing practices. The domestic medical devices lobby group, Association of Indian Medical Device Industry (AiMeD), has urged the government to move toward an evidence-based “fair pricing” framework amid concerns over inflated MRPs and weak transparency.

 

The industry body said it welcomes the ongoing review of price regulations by the Department of Pharmaceuticals, the National Pharmaceutical Pricing Authority, and the Ministry of Health and Family Welfare, arguing that the current system constrains ethical manufacturers from improving affordability.

 

AiMeD forum coordinator Rajiv Nath has proposed a shift to a transparent pricing model anchored in rational markups across the supply chain—from ex-factory or import landed cost to the final consumer price. He has called for multi-stakeholder consultations involving healthcare providers, patient groups, distributors, importers, and insurers to define these margins, alongside pilot programmes to test the framework before wider rollout.

 

Nath said such an approach could address large disparities between production costs and retail prices. “If the government initiates evidence-based pilots, consumers could see significant, rational price corrections on essential medical devices without compromising quality or supply,” he said, citing examples where prices could be materially lower under a fair pricing benchmark. He added that the current system must move “beyond misleading inflated MRPs,” and that rational markups across the value chain could help reduce insurance premiums and expand coverage.

 

The push comes against the backdrop of growing scrutiny of India’s MRP system, particularly in healthcare. Stakeholders at a recent consultation flagged that MRPs, originally intended as a consumer protection tool, have in many cases become inflated ceiling prices rather than fair benchmarks. Patients, especially in hospital settings, often lack the ability to compare or negotiate prices and end up paying the full MRP, even as discounts vary widely across other channels. Nath has previously pointed to these distortions, noting that wide gaps between base costs and retail prices can skew incentives across the supply chain toward higher trade margins rather than affordability.

 

From a consumer perspective, Bejon Kumar Mishra, international consumer policy expert, said the lack of transparency has eroded trust. “As consumers, we want transparency and accountability—we seek value for money, not profiteering driven by information gaps or weak regulatory oversight,” he said, adding that MRP “has become a joke” in many cases, leaving buyers confused and often overcharged.

 

However, trade representatives have pushed back against proposals to compress margins.

 

Rajesh Sawhney of SAMA Group, former president and chairman of the subcommittee at the Surgical Manufacturers & Traders Association (SMTA), argued that intermediaries such as distributors and stockists add “genuine, measurable value” through logistics, credit, and compliance, and do not arbitrarily inflate prices. What appears as a markup, he said, reflects the cumulative cost of moving products from factory or port to patients across a complex national supply chain.

 

He also highlighted that trade margins cover multiple cost components including freight, warehousing, inventory holding, extended credit cycles to hospitals, and regulatory compliance, particularly under GST, along with a reasonable profit margin to sustain largely MSME-led distribution networks.

 

He also flagged rising geopolitical risks, noting that conflicts in regions such as Ukraine and the Middle East have disrupted global supply chains, increased freight costs, and pushed up landed prices of imported devices amid currency volatility. Against this backdrop, he said, compressing margins could make distribution economically unviable.

 

Sawhney contended that the real issue lies at the point of care, with some private hospitals charging patients the full MRP regardless of procurement cost. He warned that uniform margin caps could make distribution unviable, particularly in Tier-II and Tier-III markets where logistics costs are higher and order volumes lower, potentially impacting availability. He further pointed out that existing regulatory safeguards—including limits on annual MRP increases and price caps on critical devices—already provide a functional oversight framework, cautioning against additional blanket margin controls.