Manufacturers hail steps to cap profit margins

New Delh: The Association of Indian Medical Device Industry (AiMeD) on Wednsday lauded the Delhi government for working on capping profit margins of hospitals on drugs and devices, saying this will help consumers access medical devices at reasonable prices.

Based on recommendations of an expert panel, the government is likely to come out with a policy to cap profit margins of city hospitals on drugs and devices, according to sources.

“We applaud the steps taken by the Delhi government and the advisory  given by the IMA to consider capping of profit margin to 50 per cent over the procurement cost of a hospital. This will result in consumers getting access to medical devices at prices below MRP,” said Rajiv Nath, forum coordinator, AiMeD.

The nine-member panel, headed by Director-General of health services Kirti Bhushan, was set up by the Kejriwal government on December 13 last year.

“We submitted the recommendations about two months ago and the new policy on capping of profit margin by hospitals should be out by this week,” a top official said.

The move comes after a public outrage on the death of a child due to dengue last year at a private hospital in Gurgaon, which charged the family around Rs 16 lakh for medical treatment.

The committee had suggested capping the profit margin for drugs and devices at a maximum of 50 per cent above the manufacturing price or procurement cost, whichever was lower, the official had said.