NPPA had slashed prices of drug eluting stents & bioresorable vascular scaffolds as it found companies were making nearly 400% profits on these stents in India.
The move by the Indian drug pricing regulator to cut stent prices by over 50% earlier this year has not lowered the treatment cost as a leading hospital says it has “restructured procedure costs” to compensate for revenue erosion.
A coronary stent is a wire mesh tube used to clear blockages in the arteries that pump blood to the heart and prevent heart attacks. In February this year, the National Pharmaceutical Pricing Authority (NPPA) had slashed prices of drug eluting stents (DES) and bioresorable vascular scaffolds (BVS) as it found companies were making nearly 400% profits on these stents in India.
“The pricing mechanism in the industry was structurally defective, which means that the profitability was coming only from the implant or the stent and not from the procedure,” said Ashutosh Raghuvanshi, CEO of Narayana Hrudayalaya, the Bengaluru-headquartered hospital chain. “These procedures were not appropriately priced so there was a correction which was required, so we have deconstructed our packages now. To the patient, the treatment cost will still be the same as what it was before the price control,” Raghuvanshi explained.
As soon as the price control order was passed in February, NPPA had put a stipulation that for six months hospitals cannot change the price of their procedures, which resulted in `30-crore loss for the hospital. The regulator has put similar restrictions on stent companies too who were not allowed to withdraw their products until October.
Raghuvanshi said the profitability for hospitals was coming from the implants and not the procedures, which meant that these implants were cross subsidising the procedure cost. Before the price regulation, patients would get one bill for their angioplasty surgery, now hospitals have started issuing separate bills — one for the stent and other for the procedure.
Stent price cuts, which was followed by price cuts of knee implants, have angered several multinational medical device makers who are the key suppliers of these products. In September this year, post the knee price cuts, the lobby group of multinational device maker AdvaMed said price control was a blunt instrument that does not address the concerns surrounding affordability and accessibility, but has been shown to have negative impact largely led by quality concerns and access to next generations/innovative technologies.
“Any policy that impedes innovation will not only make Indian innovators non-competitive in global markets, but will also deter global organisations from making their latest products available to Indian patient population”, the association added.
Medisense Health Solutions