Price controls hurting FDI in medical devices sector

2 min read
  1. According to the data released by the Department for Promotion of Industry and Internal Trade,Foreign Direct Investment (FDI) in the medical devices sector has decreased from $439 million in 2016 to $66 million in 2018.
  2. The decrease in FDI has been attributed to the implementation of price controls in the medical devices.Further,the inflows has decreased in spite of Government India permitting 100% foreign direct investment (FDI) through automatic route in medical devices sector.
  3. Meanwhile,sectors in India which attracted the highest FDI includes services sector,computer software and hardware and telecommunication.
  4. Recently,Drugs Technical Advisory Board (DTAB) had recommended that the Centre should include all medical devices in the country under the Drugs and Cosmetics Act,1940 in a phased manner.Currently,the government regulates 27 notified medical devices under the law.
  5. When these rules are implemented,this will lead to medical devices being treated as drugs with (a)more stringent tracking systems (b)mandatory reporting of all adverse reactions and (c)registration of device before it is allowed into the market.