Healthcare sector feels impact of Middle East tensions

The Middle East crisis is increasing manufacturing costs for medical devices in India, with raw material prices rising sharply. Industry bodies warn that prolonged disruptions could lead to shortages and higher prices for patients unless government relief measures are introduced.

Hyderabad: The ongoing crisis in the Middle East has begun to impact the healthcare sector, which is witnessing a significant surge in the cost of essential medical devices and accessories. Industry experts have pointed out that as margins shrink, the day is not far when the additional costs incurred by manufacturers are passed on to patients.

According to the Association of Indian Medical Device Industry (AiMeD), input costs for critical medical-grade plastics, including polymers like polypropylene and PVC, have jumped by nearly 50 per cent. Such polymers and PVC are vital ingredients for manufacturing syringes, and IV sets, catheters and blood bags and gloves that are worn by health care workers.

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Additionally, the cost of Piped Natural Gas (PNG) used for factory heating, required to manufacture plastic parts of medical devices, has nearly doubled, while diesel for self-generated power and packaging materials has risen by over 20 per cent.

Multiple reports have also indicated that a few medical glove manufacturing hubs, like Visakhapatnam, have even faced production halts due to LPG supply suspensions. Several reports have also suggested that many manufacturers, just to sustain production, have already revised product prices upward by 10 per cent to 20 per cent.

While the present hospital stocks are supported by existing inventory buffers, industry leaders and bodies like AiMED have warned that prolonged disruptions could lead to acute shortages and further price hikes.

Due to the ongoing crisis in the Middle-East, medical device companies have also reported a shortage in supply of helium, needed for cooling MRI magnets. Many fear that such developments could play a role in pushing up the costs of medical scans.

Meanwhile, AiMeD has urged the Central Government for urgent relief, including fast-tracking GST refunds and providing a temporary 2.5 per cent rebate on raw material imports, which will go a long way to make up for the shrinkage in their margins.