Stent price control: 5 reasons why ‘high-end stent’ companies might still hope

2 Feb

As the National Pharmaceutical Pricing Authority (NPPA) gets down to revisiting the prices of stents and discussing their makers’ grievances in February, here are five reasons why multinational stent companies selling relatively high-end products can still hope.

‘All stents made equal’ argument reopened to debate?

According to a Mint newspaper report, the NPPA  requested a meeting of experts to re-examine if there are reasons to create a new category for certain types of drug-eluting stent that will then, presumably, merit different (and higher) price caps. An expert commitee of 18 cardiologists had opined that all generations of DES are the same and that available data did not demonstrate superiority of one type over another. This had informed the uniform price cap for all such stents in the first round of price cuts and led some companies to withdraw products citing unviability.

At the time, the newspaper had quoted NPPA chairman Bhupendra Singh as saying that the expert committee’s opinion legally bound it to put all the DESs together. The NPPA’s request to the Union Ministry of Health to call for a review suggests that MNCs might have scored a point. They still cannot argue superiority – as that data is unavailable – but they can demonstrate the need for variety and finetuning of DES for specific patient groups or angioplasty cases for better outcomes, among other things.

The caveat here is that since the Mint article was published, there appears to be no indication from the Ministry that such a review will, indeed, be called for. (Update: Since this post was first written, Mint reported that an eight-member expert committee did meet on January 25 and said there were no grounds to make this distinction. See here.)

Quality bigger bugbear in med tech than pharma

Quality has always loomed large in clinical decisions involving implantable medical devices. This is because, for decades, the lack of regulation of medical technology allowed devices bearing regulatory stamps from the US and Europe to gain currency with leading hospitals and doctors.  The suspicion around locally-made products is going to take some time to undo; even though stents are regulated now, the law used is actually meant for drugs. MNCs also enjoy the advantage of the incumbent. This influences decisions around life-saving drugs and devices as doctors are reluctant to switch unless given a good reason to.  The demand of foreign med tech companies for a separate category of ‘high-end’ and ‘innovative’ stents has found vocal supporters among the medical fraternity.

More consolidated market than pharma

Three large MNCs reportedly control  60 per cent of the stent market.  It would be difficult to pretend that their interests don’t matter. Also, while the NPPA has found that local industry’s share post price control is up,  it is too much to expect the homegrown sector to take over the market in the short term (including replacing MNC innovation with their own) as they need greater financial and technological wherewithal . The ever-present quality overhang makes their job tougher.

Making nice with foreign investors

Foreign med tech companies appear to be the most voluble protesters against stent price control, including on the international stage, as they have the most to lose. This sullies the foreign investor-friendly image that the government has been trying to project.

Shifting focus to hospitals

It has been reported that hospitals have made up for stent price cuts by readjusting margins across other parts of their angioplasty package. A recent survey released by the MNC association ADVAMED and the health information company IQVIA found that only 15 per cent of the private hospitals surveyed reduced angioplasty procedure costs by over 25 per cent. In a majority, the reduction was is in the range of 10-25 per cent. This, when stent prices were slashed by over 80 per cent. This begs the question : is the risk of creating shortages, potentially compromising on quality,  and alienating investment  being balanced with the intended benefit to patients?

To sum up, MNCs might yet succeed in wresting some concessions. What shape and form they will take, remains to be seen.

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