"It was found that huge unethical markups are charged at each stage in the supply chain of coronary stents, resulting in irrational, restrictive and exorbitant prices… pushing patients to financial misery," say the authorities.
Aneesh Phadnis and Veena Mani find out what the manufacturers and the hospitals have to say.
Stents will now be priced below ₹30,000 apiece following the government's decision to slash their prices by as much as 85 per cent. The government has also made it mandatory for hospitals to bill stents separately from surgical procedures or package costs.
A stent is a mesh tube placed in arteries with a view to improve the blood flow to the heart.
Health activists welcomed the government move as it could lead to a reduction in medical expenses.
Apollo Hospitals said it would pass on the benefit to patients but manufacturers are upset over the decision that caps prices of all forms of stents at Rs 30,000.
"The government decision is an overkill," said Rajiv Nath, forum co-ordinator, AiMed, which represents domestic stent manufacturers.
Stents sold in India at present are priced between ₹25,000 and ₹200,000 apiece. Most stents sold in the country are drug eluting.
On Monday, the National Pharmaceutical Pricing Authority set the price ceiling for stents. This follows the government's decision to include stents in the National List of Essential Medicines and their classification as a scheduled drug.
According to the NPPA order, the price of a bare metal stent will be capped at ₹7,260 while drug eluting stents and biodegradable stents will be priced at ₹29,600 apiece. These prices are exclusive of taxes.
"During deliberations (with stakeholders) it was found that huge unethical markups are charged at each stage in the supply chain of coronary stents, resulting in irrational, restrictive and exorbitant prices in a failed market system driven by information asymmetry between the patients and doctors, pushing patients to financial misery," the NPPA said while justifying its decision to impose the price ceiling.
"The stents price cut makes angioplasty more accessible. Apollo Hospitals welcomes the intent and will pass on the benefit to patients," Apollo Hospitals Joint Managing Director Sangita Reddy tweeted.
Some industry observers, however, remain sceptical about the impact of the government decision as there is no cap on hospital charges or packages.
"Such a regulation might lead to flooding of substandard products from China and Canada. US FDA approved stents will be withdrawn from the market as the government has brought all stents under one category," said Dr Vivek Jawali, chief cardiothoracic and vascular surgeon of FortisHospital.
"Rules need to be reasonable and implementable with a smooth transition. The worst thing about this notification is that the NPPA expect all stocks in the market to be available at the new prices overnight," Nath pointed out.
"Hospitals will demand credit notes for losses made on inventories they hold. Manufacturers will be asked by the department of pharmaceuticals to pay penalties for not acting overnight. If importers and manufacturers go to court, the public will suffer. Ideally, the implementation should have been from a cut-off date," he added.
"The NPPA notification completely disregards all stakeholder representations on the need to differentiate stents based on their technological differences. While the intent is to cap prices in the interests of patients, this pricing has the potential to block innovations and limit access to world-class medical care," AdvaMed, which represents foreign stent manufacturers, said in statement.
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