In an attempt to make life-saving cardiac stents more affordable, the National Pharmaceutical Pricing Authority or NPPA has proposed fixing prices ranging between Rs 21,881 and Rs 67,272. The price of stents, which are tiny devices used to unblock diseases arteries, currently starts at Rs 23,000 and goes up to as much as Rs 2.5 lakh per piece.
The NPPA’s moves on cardiac stents have been watched closely by manufacturers, doctors and health activists, ever since the authority announced on January 2 that it would not use the formula it normally uses to cap drug prices. As per procedure set out in Drug Price Control Orders, the authority usually sets a ceiling price by averaging the retail prices of drugs that have at least 1% of the market share each and marking it up by 16% for the retailer.
However, considering that stents are sold by hospitals at varying prices and, often at outrageous profits, the NPPA has come up with different formulae that do not consider the maximum retail price as the base price.
One formula being considered for calculating the ceiling price is based on the price of the device to distributor. Another includes the landed cost, with reference to imported devices, and accounts for manufacturing, shipping, and customs duties. Another formula is based on the cost of production or the cost of the stent under Central Government Health Scheme that amounts to Rs 23,675.
The Medical Devices Forum of the Federation of Indian Chambers of Commerce, which largely represents companies manufacturing foreign stents, had made a representation to the NPPA asking for price to hospital to be the base for calculations. The price to hospital is a much higher base price, because it includes the profit margins of the distributor. On January 4, the NPPA added price to hospital as a possible base price to fix the ceiling price.
As expected, when the NPPA calculated ceiling prices using these different starting points, the price calculated using “price to hospital” was the highest at Rs 67,272.
In the next one month while the NPPA finalises the ceiling price for stents, stakeholders like pharmaceutical companies, doctors and civil society will lobby before the authority to protect interests of either the industry or patients, depending on where they stand.
Different kinds of stents
A stent is a short wire mesh tube that acts as a scaffold to keep a previously blocked artery of the heart open. A bare metal stent is an older generation device that consists only of the scaffolding. The newer drug-eluting stent has a coat of medicine, which it releases in the artery after its insertion. The drug prevents further blockage in the artery of the heart. More than 2 lakh stents are used annually, of which drug-eluting stents constitute 78%.
The NPPA has, so far, decided to fix prices based on these two categories – bare metal and drug-eluting
However, FICCI is asking that the authority take note of further differentiation in drug-eluting like drug-eluting stents used in the majority of cardiovascular procedures, drug-eluting stents for highly complex disease subsets including diabetes, and innovative drug-eluting stents. The innovative category, FICCI said, should not be covered by Drug Price Control Order.
“If the prices for all the drug-eluting stents remain the same, then only the older generation stents will be brought to the country,” said Probir Das, chairman of the FICCI’s Medical Devices Forum. “The newer, more sophisticated ones will not come to India.”
The newer generation stents are better, Das said, because they reduce chances of re-stenosis, which is when the blood vessel becomes blocked again.
The views of cardiologists in the private sector is aligned with the foreign manufacturers.
However, a report submitted by a committee of doctors from the public hospitals across India on the essentiality of coronary stents noted that there is no superiority among the current available drug-eluting stents in terms of clinical outcomes deaths or heart attacks. The committee also said that the superiority of bio-absorbable stents, a new type of stent that dissolves in the body, has not been demonstrated yet.
A study published in November 2016 in the journal Lancet showed that bio-absorbable stents, which are classified as innovative products by FICCI, posed “increased risk” of artery blockage. Other studies show bypass surgeries that do not require stents work better for diabetic patients as compared to angioplasties that are the procedures to place stents. Despite this research, FICCI has demanded a separate category for disease subsets to allow higher pricing of innovative stents that may not always be effective.
However, the Association of Indian Medical Device Industry does not support differential pricing of stents. “We are aligned with the consumer,” said Rajiv Nath, co-ordinator of the association.
Deciding the baseline
Currently, the various stakeholders are fighting to be heard on pricing by the NPPA. Civil society groups such as All India Drug Action Network, Jan Swasthya Abhiyan, and the Alliance of Doctors for Ethical Healthcare are happy with the formula based on the Central Government Health Scheme that throws up the lowest price.
The “price to hospital” formula is with the NPPA itself saying that hospital data is not reliable as the prices change continuously.
Malini Aisola from the All India Drug Action Network said, “The data shows very clearly that the “price-to-hospital” formula is unworkable and does not serve the purpose of affordability. Public policy involving people’s health should not be predicated upon non-verifiable, inflated industry data. The industry itself has admitted that it has imperfect knowledge of the actual price. Government and political leadership should not legitimise the exploitation of the people.”
But the FICCI body wants hospitals at least have their say before any decision is made. “A retailer just dispenses with the product,” said Das. “A hospital is deploying and implanting the product. It also creates a cathlab which costs at least Rs 2 crore. It also maintains an inventory,” said Das. Cathlab is short for catheterisation laboratory where diagnostic imaging equipment is used to visualise the heart and its arteries.
When pointed out that hospitals charge for implanting stents, Das said that if stent prices fall, hospitals will compensate by raising costs of the medical procedure.
Fixing the price of stents can end another unethical practice. It is an open secret that the hospitals demand a cut from the pharmaceutical companies for using devices, which leads to irrational use of stents. Dr Anil Kumar Pathak from the Alliance of Doctors for Ethical Healthcare recounted a case of a patient in his late 30s who was implanted with the stent, even though he had only 50% blockage in his arteries and did not need one.
“The fixing of the price will increase the rational use of stents,” said Dr Arun Mitra, also a member of the alliance. “The cuts have so far encouraged doctors to implant stents when it was not required.”