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A price cap on stents is good for your heart, here is why

The Indian Economist

Pricing of coronary stents is an issue that has been debated for quite some time. The National Pharmaceutical Pricing Authority (NPPA) has decided to cap the price of stents between Rs 25,000 and Rs 31,000 approximately. Earlier, the pricing of stents varied from Rs 25,000 to a few lakhs rupees per item.

Understanding the use of stents

A coronary stent is a tube-shaped device placed in the coronary arteries that supply blood to the heart, to keep the arteries open in the treatment of coronary heart disease. The capping of its price will encourage doctors to implant stents rationally and use it only when it is deemed appropriate.

It is argued that the NPPA’s decision to regulate the pricing of stents is a laudable initiative to make life-saving cardiac stents more accessible and affordable.

What necessitates the price control?

There have been innumerable instances where pharmacies and hospitals collude to monopolise the stent market and fix their price higher than usual. Since hospitals obtain medical products in large quantities, it provides them with more room for negotiation. The rivalry between multiple sellers, who compete to attract bulk purchasers, works effectively in the hospitals’ favour. The NPPA’s report on the necessity of coronary stents affirmed that the price difference between the actual cost of the stent and the landed cost (manufacturing, customs, logistics and shipping) of the stent is substantial.

Having a ceiling limit for stents can end another unscrupulous practice. Generally, the hospitals get a fixed amount as a cut from the medical companies for utilising such devices, often leading to irrational usage of stents. Hence, it becomes essential to cap the prices of drugs and medical devices.

Hiccups in regulation of stents’ prices

India views drugs as a vital commodity and has legislated a Drug Price Control Order (DPCO), in order to ensure wider accessibility and affordability of drugs. The DPCO warrants that those drugs which are included in the said schedule must not be sold at a price more than the capped price that is fixed by the government. On similar lines, the government can legitimately cap the price of stents.

Affordability and accessibility of drugs in a population depends upon multiple factors such as healthcare arrangement, infrastructure, socio-economic status of individuals and coverage of the medical health insurance. Currently, the Indian population is in dire need of stents which are not covered by a medical health insurance. This restricts the market even further.

A pertinent question is whether the government can extend the DPCO to medical devices, since the power to cap the prices originates essentially from the Essential Commodities Act, 1955. The Act does not incorporate medical devices as an essential commodity.

Further, it is not yet certain as to how the government aims to safeguard the interest of all stakeholders in the industry with its plan of action. Nonetheless, it is amply clear that the price ceiling for medical devices is no longer a distant reality.

Downsides of capping the price of stents

The NPPA’s initiative has been closely observed by various stakeholders involved in the process of manufacture and sale of stents. Various experts are of the view that stents involve high-grade technology that is continuously evolving. This requires high investment for research and development. Further, they are of the view that inclusion of stents in the National List of Essential Medicines might result in price control of the stents and this may hamper technological advancements.

Further, there are varieties of stents available in the market. Some of the stents are manufactured indigenously while others are imported and marketed in the country. The stakeholders request that the government must examine the continuance of strict quality assurance mechanism for all stents.

Moreover, experts suggest that drugs and medical devices are essentially distinct and applying the same regulatory viewpoint in the case of devices would not be proper. Also, all stents are not the same. It has many variations in terms of metal utilised in the platform, stent design, a type of polymer used, drug elusion kinetic, amongst others. Hence, it would not be appropriate to regulate the prices of all stents in the same manner.

What can be done?

The cost of the total procedure must be considered rather than the cost of the stent alone. Pricing control may lead to a quality compromise, delay, shortage in the introduction of new devices and might further hinder the technological advancement of the products concerned. At present, there is no apparent advantage among the modern accessible coronary stents in terms of clinical results, heart attacks or deaths.

The price control mechanisms have been met by stiff resistance, most notably by the private sector engaged in the pharmaceutical industry, i.e., hospitals, doctors, drug manufacturers, etc. And this might be a reason that why such a mechanism has not been approved at the state government level. Consequently, the government needs to augment and ensure that the interest of the poor and the needy is protected.