Price Control on Medical Devices in Emerging Economies will be Beneficial in the Long Run
Jul 16, 2015 | Healthcare | Christina Johnsan
Governments in developing economies have been mulling the introduction of price control on medical devices for a long time. India, which imports around 75% of its medical devices annually, is proposing to bring price regulation in a bid to make healthcare affordable to its population of over one billion.
Although cynics are raking up the failed experiments in Netherlands and Japan, it is worthwhile to remember that the socio-economic conditions in emerging nations are starkly different from those in developed nations.
Price Control on Medical Devices: A Step in the Right Direction
Regulating the price of medical devices should be welcomed as a step in the right direction, as it has the potential to impede the malpractices in the healthcare sector. Medical device manufacturers, distributors, retailers, and other stakeholders in this market often prescribe expensive stents and implants to patients, in a bid to boost their personal interests. Bringing medical devices under government control can reduce the exploitation of patients by retailers and healthcare professionals.
Emerging countries are dependent on foreign imports to make medical devices available to their general population. For example, according to estimates, India imports nearly two-thirds of its medical devices. The high cost of foreign-made medical devices strains the shoestring healthcare budgets of emerging countries, and price control can work to alleviate that.
Price Control Can Make Healthcare Affordable for Everyone
The general population in emerging nations lacks access to health insurance, and a substantial percentage is dependent on government services to receive treatment. However, not all government hospitals are equipped with adequate medical equipment, owing to shortage of funds. If medical devices are brought under regulation, it will be feasible for the government to provide efficient healthcare services to the people.
On a macroeconomic level, bringing price control on medical devices—most of which are imported from developed nations—can provide an impetus to the local manufacturers. The domestic medical devices market in emerging nations has never been provided a level playing field due to the nexus between international manufacturers and private healthcare sector. By putting the medical devices under scrutiny, the government will in a better position to keep a check on the irregularities, which in turn will make this industry transparent and competitive.
Governments in emerging countries will need to back their local manufacturing industries to compensate for lack of foreign interest. Opponents of price control have warned that in the absence of profitability, foreign medical device companies will look for more lucrative markets, creating shortage of medical devices and equipment. In order to counter such a scenario, the government will need to invest in research and development, while providing adequate financial support to its local manufacturing sector.