Capped stent prices include 8% trade margin, says regulator

Viswanath PillaMoneycontrol
The country's drug pricing regulator said on Monday that the capped prices of coronary stents it had announced last week included an 8 percent trade margin for manufacturers and importers.The stated margin is much lower than what stent manufacturers and hospitals were enjoying before the price cap came into effect on February 14.

In a statement explaining its rationale for capping the prices of stents, the National Pharmaceutical Pricing Authority (NPPA) said that there is hardly any specific retail channel for supplying stents and that direct supply of coronary stents to hospitals is also done by manufacturers and importers."Considering the high-end value market of coronary stents, this 8 percent trade margin would cover margins across the trade channels working from the level of manufacturer to the end user," read the NPPA statement. "The 8 percent margin also adequately covers hospitals handling charges, if any."NPPA chairman Bhupendra Singh on Monday reiterated that the regulator has provided enough room for stent makers to make a profit.The NPPA's decision last week to cap prices of the heart scaffold has caused a fair deal of heartburn to stent makers. Data put out earlier by NPPA pointed out that distributors had trade margins between 13 and 196 percent for sale of stents to hospitals, while hospitals enjoyed a margin between 11 percent and 650 percent on sales to patients.NPPA has capped the prices of bare metal stent at Rs 7,260 and drug-eluting stent (DES) and biodegradable stents at Rs 29,600. Both the prices are exclusive of value added tax. DES constitutes 95 percent of the market.NPPA had already clarified that it didn't take price to hospitals (PTH) as price to retailers (PTR), and considered hospitals out of stents' "trade channel" while fixing the prices.