Stents can be more affordable in india

In addition, introduction of broader health care coverage for CVD through programmes like Ayushman Bharat has necessitated a closer look at the cost of providing health care.

Published: 11th August 2019 04:00 AM  |   Last Updated: 11th August 2019 09:42 PM   |  A+A-

Over a span of a couple of decades, India has transitioned from a disease burden of communicable/ acute diseases (e.g., diarrhoea, various bacterial infections) to non-communicable diseases (NCDs) or lifestyle diseases (e.g., diabetes, cardiovascular disease (CVD) etc). The World Health Organization estimates, for India, an economic loss of $237 billion between 2005 and 2015 on account of NCDs.

Among NCDs, CVD is the leading cause of mortality and affects Indians at an earlier age compared to Europeans, and impacts people across economic strata. In the context of addressing the CVD disease burden, affordability of drugs and medical devices has been a concern in view of the aging population and changing disease profiles.

In addition, introduction of broader health care coverage for CVD through programmes like Ayushman Bharat has necessitated a closer look at the cost of providing health care. Drugs for managing and treating CVD have long been on the national list of essential medicines and the costs have been managed through the Drug Price Control Order. For instance, blood pressure and cholesterol lowering medications are now available at affordable prices through usage of generics, and this has been a pillar in controlling costs in prevention and treatment of CVD as far as drugs are concerned.

What about medical devices? Cardiac stents form one of the core pillars in the treatment of CVD. It is estimated that more than half a million stents are implanted across the country every year. Two years back, the Government of India categorised cardiac stents as essential medicine and imposed a price cap. For drug-eluting stents (DES), which account for more than 90 per cent of stent usage, the cap was set at Rs 29,600. Subsequently, the cap was revised to Rs 27,890. This year, the government has increased the price, considering inflation, to Rs 30,080.

What has been the effect of this announcement in the market? Over the past couple of years, the pricing of stents has been viewed through different lenses. For instance,one approach, in favour of a price cap, was to look at the landed price of an imported stent and examine whether the subsequent markup was justifiable. A report from National Health Systems Resource Centre, which was referenced by the National Pharmaceutical Pricing Authority (NPPA),  showed that there was evidence of substantial markups on the landed price, ranging from 300 per cent to 1,000 per cent, and hence a credible argument for capping. 

On the other side of the argument, against a price cap (or at a minimum, an argument in favour of a differential pricing between imported and domestic stents) is that imported stents manufactured by multinational companies are better in “quality” than Indian-manufactured stents, justifying the higher prices of the former. The NPPA rejected this argument and set a single price cap on all DES. In this context, it is interesting to note that several Indian manufacturers have successfully complied with regulations globally (e.g., EU, Latin America ) and are exporting thousands of stents to various countries.

In addition, there is now evidence to show equivalence between stents manufactured in India and imported stents. An additional argument for differential pricing was that the entry of innovative stent products would be curtailed by imposing a uniform price cap. In considering this argument, the NPPA looked, in essence, to the guidelines of the Supreme Court in Novartis vs. Union of India, where a guidance on innovation was to be based on improvement in therapeutic efficacy.

This interpretation would put the burden on manufacturers to claim improved efficacy in seeking differential pricing. No such claim (of improved efficacy and request for differential pricing) has yet been approved by NPPA.

Regardless of where the stent is manufactured, one lens through which the appropriateness of the price cap can be seen is through the pricing of similar stents in other countries. There is now evidence to suggest that the stent price caps set in India are not necessarily the lowest in the world. The most recent study, published in the journal Health Affairs puts in perspective the price points of DES across various countries.

The results of the study suggest that Indian prices are not the lowest. Germany seems to lead in affordability, with its average and median pricing approximately 20 per cent and 26 per cent below the Indian price cap. This shows that it is possible to operate within a regulatory regime, as in Germany, with prices below current Indian price caps.

What about availability? Stents made by Indian and multinational manufacturers have been available in India. Given the availability of supply from Indian and multinational manufacturers, the NPPA report concludes that there have been no reported shortages of stents. 

In summary, considering the importance of addressing CVD, looking at the pricing of stents globally and learning from the experience of two years of price capping in India, it is possible for the government to further improve the accessibility and affordability of stents. In addition, a serious look at the prices of all the consumables used in the process of implanting a stent is necessary to ensure that the benefit of the price cap on stents is not eroded by increase the prices of such accessories.

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