Price Controls Remain A Barrier To Robust and Reciprocal U.S.-India Economic Relationship

Without meaningful changes to regulatory policies in India, price controls that impact medical devices, pharmaceutical products, among other sectors, will remain costly barriers to trade and investment for U.S. companies in India. 

In comments made this year to USTR, AFTI described particular concern with price controls in India. 

To this end, the National Pharmaceutical Pricing Authority (“NPPA”) of India in 2017 capped the price of coronary stents and knee implants forcing some companies to sell their most innovative products in India at a loss. As a result of the price controls, companies have begun removing their latest technologies from the market and delaying the introduction of newer generations.  This policy has also rewarded local Indian manufacturers – who welcomed the price controls and have since gained greater market share.

Despite having some of the lowest prices on medicines in the world, after decades of government price controls essential medicines in India are still not easily accessible. Unfortunately, in June 2016 the NPPA announced that it would set new ceiling prices for all medicines, including those for which a ceiling price already had been set only three years prior. And a 2015 study by IMS Health found that price controls are neither an effective nor a sustainable strategy for improving access to medicines.

Ultimately, price controls penalize American exports from many innovative and globally competitive sectors and they remain a longstanding trade and investment barrier to a more robust and reciprocal U.S.-India economic relationship.