Medical Technology Association of India (MTaI), recently said that the government must consider deferring statutory taxes, fees, dues and compliances for a period of 5-6 months and direct the financial institutions, so that liquidity is maintained throughout the value chain, without creating any debilitating burden on any stakeholder in the healthcare value chain.
The MedTech Sector, being at one end of the value chain, is already heavily stressed on liquidity due to the unintended consequences of some well-meaning measures of the government like price control, the steeply hiked logistics charges, falling INR value, the newly imposed Health Cess (which the industry is forced to absorb) among others. The sector does not come under that group of industries which have the liberty to charge interest on delayed payments, or have the breathing space to offset these extra expenses.
MTaI Chairman and Director General, Mr. Pavan Choudary said, “The grave threat of COVID-19 has severely affected the whole healthcare continuum, right from a device manufacturer/importer, to a hospital or a private clinic in tier 2 or 3 towns in the country. The current lockdown, though necessary, has added to this by restricting the supply chain and the movement of healthcare personnel engaged in manufacturing or service of the medical devices and equipment. Needless to say that there have been some cash flow issues for all the stakeholders involved, as the usual business models are affected due to the reduced trade. Therefore it is crucial for all stakeholders, be it the manufacturer or importer, supply chain partner, distributor, retailer or hospitals, to come forward and help each other in these difficult times, without taking any undue advantage of the situation.
“In this regard, the medical device industry has come forward in some instances to support the hospitals and doctors all over the country that are affected by the lockdown and help navigate in these tough times, by extending warranties and maintenance contracts for the duration of the lockdown (which is currently for 21 days from March 25, 2020)”, Mr. Choudary added.
“Due to current COVID-19 crisis, it becomes all the more crucial that the stakeholders at the other end of the chain, such as hospitals, clinics etc. are adequately funded to pay their vendors/distributors, who can pay the manufacturers/importers to ensure that there is a regular supply of medical devices and equipment to treat the COVID-19 patient and the industry can carry on the manufacturing/importing of devices, while remaining unaffected by the liquidity squeeze. The need of the hour is a robust, well-funded and ever expanding healthcare which is prepared for the war against the Coronavirus.” said MTaI Director, Mr. Sanjay Bhutani.