Price monitoring of heart stents was on the cards for quite some time. Heart stents were included in the National List of Essential Medicines (NLEM) on July 19 last year, and then into Schedule I of the Drug Prices Control Order (DPCO), 2013 on December 21. And the government had to cap stent prices before the March 1 deadline imposed by the Delhi High Court, thanks to the persistent efforts of activist lawyer, Birender Sangwan over the past two years. What has shaken up industry was the drastic drop in price and the lack of a transition period. Which means that all stocked stents, bought at the previous rates, will have to be sold at the new ceiling prices.
There were apprehensions that hospitals would make up this price difference by increasing procedure costs, doctors’ fees and forcing patients to stay longer. However, hospitals have been warned that these practices too are being closely monitored. But, will the NPPA really be able to go after the defaulters and recover the overcharged amount along with 15 per cent interest? The government seems to be relying on whistle blowers and alert patients, nudging them to post their complaints via two mobile apps, Pharma Jan Samadhan and Pharma Sahi Daam, started by the government when they reduced prices of medicines over the last year.
Insurance players seem to have sided with the government on this issue, obviously because it reduces their payouts. A note from Bajaj Allianz General Insurance projects that a reduction in stent prices by 85 per cent could reduce total angioplasty procedure cost by around 25-30 per cent. Does the government have the manpower to enforce its diktat that stent prices will have to be mentioned separately in billing receipts?
Stent makers predictably countered the price caps, foretelling that the price cap would defeat the purpose of the Make in India initiative. But this argument was somewhat deflated when Gujarat – based Meril Lifesciences reportedly became the first Made in India BVS to get the regulatory nod in late February, though marketing approval is still awaited.
The price caps on stents has pitted hospitals and surgeons/ doctors, against stent manufacturers, with the latter lobby alleging discrimination. It is easier to put a price tag on a product than on the expertise of an individual doctor/ surgeon so its anybody’s guess that this loophole will be still be used for some time.
Will the medical devices segment go down the same path as the pharmaceutical sector? The pharma sector is suffering from the impact of shrinking margins of medicines on the price control list. As companies cut corners to reduce price or exit these categories, consumers are forced to rely on products which might not be as safe as desired. Down the supply chain, manufacturers of the active ingredients in these medicines too have shut shop. Today, the country is dangerously dependent on countries like China for key ingredients, which often turn out to be of so poor quality that our exported finished products risk being rejected by importing authorities.
The NPPA is unlikely to stop at heart stents, given that it has already asked for pricing data on other medical devices, especially more expensive categories like orthopaedic implants. Predictably, just a fortnight after the cap on stent prices, Shanghai-based MicroPort Scientific Corporation announced the launch of their heart stents and joint implants in the country. It is high time that the government and med tech majors work together to find a middle path.
Viveka Roychowdhury
Editor