NEW DELHI – India's drug pricing regulator has capped prices of several categories of cardiac stents and warned against companies deliberately withholding manufacture and supply after the price cap.
The National Pharmaceutical Pricing Authority (NPPA), which also oversees medical devices, had earlier on Feb. 13 ordered a price cap on drug eluting stents (DES) and bioresorbable stents at about $443 (Rs29,600) and that of bare metal stents at $7,260 (Rs7,260) effective immediately.
In a notification on Feb. 21, the NPPA warned that all manufacturers and importers were under "legal obligation to maintain smooth production and supply of coronary stents of all brands which were available in the country before price cap" and that action would be taken against companies not complying with the order.
The Feb. 21 notification said that by that date, all stent manufacturers were supposed to have sent their revised price list to distributors and hospitals, with copies to the NPPA and state drug regulatory authorities. But it had come to NPPA's notice that a cardiac care center at a hospital in Delhi did not put up the revised price list, as it had not received it from the stent company.
Also, a few hospitals have refused to treat patients with the best category of stents on grounds that the companies supplying them have requested them to put them on hold.
The NPPA has written to state health secretaries to ensure that there is no shortage of stents following the decision to cap prices and has also sent a letter to the Health Secretary asking him to take up with the Indian Medical Association and the hospitals the matter of compliance with the pricing order.
The NPPA had earlier asked stent makers and importers to ensure that production and supply of stents was maintained at the level as before the introduction of price cap.
ORDER BREEDS ANGER
Indian stent manufacturers and representatives of the Indian medical device industry reacted sharply to the NPPA's orders.
"This is disruption of the worst kind, bereft of sound economic or practical logic," said Gurmeet Singh, managing director of Translumina Therapeutics, an Indian stent manufacturer. "This kind of arbitrary price fixation will do more harm to the patients, industry and the trade in the long run and will damage domestic manufacturing."
"It's an overkill," said Rajiv Nath, Forum Coordinator of Association for Indian Medical Devices Industry (Aimed).
One report suggested that stent manufacturers earn an average 8 percent before interest and taxes compared to a pharma industry average of around 40 percent.
"The [Indian] Government cannot vacillate from one extreme to another," added Nath.
The government had earlier given stent manufacturers a free run, which resulted in a series of malpractice lawsuits, mostly overpricing of stents by some firms. The government is now trying to remedy the situation with measures such as a price caps, which Nath described as "neither feasible nor sound."
"Regulations, however well intended, have to be reasonable and implementable with smooth transition and not disruptive. The worst thing about this notification is that NPPA /DPCO (Drug Prices Control Orders) expect all stocks to be available at the new price overnight," he added.
Aimed has suggested that the average price of stents to hospitals should form the basis for a consensus on a price band and that prices below $599 to $749 (Rs40,000 - 50,000) for quality stents would be dampening and unfeasible commercially.
Aimed also said that there are some unanswered questions, such as how can distributors put a maximum retail price of up to $449 (Rs30,000) on stents if they have bought them at $899 (Rs.60,000) and how can manufacturers recall stocks with five-years shelf life and keep nothing in markets, because of the price cap?
The requirement that all stocks in the market be sold at the revised prices is impractical and unreasonable, and ideally, the implementation should have been from a cut-off date and next batch, it observed.
Aimed has been exhorting members and Indian importers to consider self regulation in quality and price, both for the sake of patients' safety and consumer protection, under Indian Certification for Medical Devices (ICMED's) quality certification standards; and a self-imposed price cap for each brand to be four or five times the factory price.
ISSUE HAS BEEN BREWING FOR SOME TIME
The current row has been festering for more than three years. Indian and international stent makers were at loggerheads in 2016 over proposed price caps, with multinational companies protesting the Indian government's decision to fix price caps for stents, implants that cardiologists describe as the cornerstone for treatment of coronary artery disease but are usually unaffordable to many patients in the country.
The 2016 proposal had its origins in a 2014 row when there were charges of gross overpricing of imported stents and a nexus among stent manufacturers, hospitals and doctors to ensure that doctors prescribing a brand of stents get a percentage of the profits.