Comply or Get Penalised: Govt Warns Stent Makers Tough talk follows artificial scarcity created due to withdrawal of the product by some cos
New Delhi: The government has reiterated that companies, distributors and hospitals have to comply with its order slashing prices of cardiac stents by over 75%, and warned them of penalties if they violate the directives.
Earlier this week, the National Pharmaceutical Pricing Authority (NPPA) capped the prices of drug eluting stents and bioresorbable vascular scaffolds at .₹ 29,600 and bare metal stents at .₹ 7,260. Including VAT, these stents are expected to cost .₹ 31,080 and .₹ 7,623, respectively.
A coronary stent is a wire mesh tube used to clear blockages in coronary arteries and prevent heart attacks.
Following the NPPA decision, some companies have reportedly withdrawn high-priced stents, leading to an artificial shortage of the product.
Although suppliers, such as Abbott, have denied withdrawing stents already stocked at hospitals, some manufacturers are expected to withhold high-end variants of the product. “We continue to market our full range of coronary stents available in India. In certain cases, we had initiated the process of relabeling to comply with the revised pricing notified by the government,” an Abbott India spokesperson said.
A cardiologist told ET on condition of anonymity that some companies, especially importers, have asked hospitals not to use stents priced higher than the ceiling. “But there is no shortage of stents,” the cardiologist pointed out.
According to sources, some hospitals have also decided to sell only those stents priced within the ceiling fixed by NPPA. A healthcare provider said stents are still in stock, but many pati- ents are wary of using the ones offered by these hospitals because they are outdated. “We have decided not to sell any stent priced above .₹ 30,000. But some patients insisting on high-end stents think they’re getting substandard treatment when we tell them we can’t provide these third or fourth generation stents anymore,” the provider said.
At the same time, several hospitals have stated they will pass on the benefits of the price cap to patients. “We will see to it that all patients get benefited by this order,” stated a spokesperson for Apollo Hospital Groups.
NEW REALITIES FOR STENT COS
Stent makers wounded by NPPA’s price cap are now scrambling for ways to plug gaps and remain profitable. While some companies said they are still figuring out how they may adapt to the decision, others are already considering cost-cutting options, such as discarding middlemen who supply to hospitals.
According to Indian stent company Sahajanand Medical Technologies (SMT), most of the margins made by stent makers go into paying the distributor. “What we have decided to do now is to get a drug distribution licence ourselves to save on the working capital cost. We already started the process of reaching out directly to hospitals,” SMT CEO Ganesh Sabat said, adding that reducing the supply chain cost would help companies run a sustainable business. Stent makers may also trim investment on marketing, training and academic partnerships, which could contribute at least 10-15% to their revenue, an industry executive said.
Several industry officials also expressed fears that the price cap may prevent multinational and domestic stent companies from making next-generation stents available to Indian patients. Ashutosh Raghuvanshi, CEO, Narayana Health, said the mechanism used by the NPPA for pricing may lead to the Indian market missing out on some newer multinational products.
According to domestic stent makers, the NPPA capped the price “too low” and their expectation was anything between .₹ 40,000 and .₹ 50,000. “The move could discourage reliable stent makers and lead to a growth in companies that produce poor quality stents,” said Gurmeet Chugh, managing director of Indian stent company Translumina Therapeutics.
Global stent makers say the NPPA disregarded the evolution of coronary stents over decades and didn’t pay heed to several stakeholder representations seeking to differentiate stent prices based on technological differences.
“The singular focus on controlling ceiling price of stents, without attempting to address the larger picture and correct inefficiencies in the healthcare ecosystem will not achieve its stated benefit in the long run,” said a spokesperson of AdvaMed, a lobby group for global stent companies like Abbott India, Medtronic and Boston Scientific.
Stent makers wounded by NPPA’s price cap are now scrambling for ways to plug gaps and remain profitable
Companies, distributors and hospitals found violating NPPA’s order by overcharging patients for the devices would be penalised, Minister of Chemicals and Fertilisers Ananth Kumar had said earlier. In some cases, they could even be blacklisted, he had said.
“Strict action would be taken against violators,” said Jai Priye Prakash, Secretary-Department of Pharmaceuticals, Ministry of Chemicals and Fertilisers. According to him, the government would also use various provisions of the Essential Commodities Act to penalise those found illegally and unethically profiteering or hoarding stents.