Heart of the matter: 5 things to know about pricing of stents

Viswanath PillaMoneycontrol The stent pricing data released by the Indian drug price regulator, the National Pharmaceutical Pricing Authority (NPPA), as part of its efforts to finalize a transparent price control mechanism for stents - has once again brought back to spotlight the inflated prices of stents and the need for regulation. The data put out by NPPA on its website indicates a massive escalation of stent costs often by as much as 10 times by the time the implant reaches patient from the manufacturer. NPPA sought pricing information from stent manufacturers, marketers and importers in line with government’s last month notification to bring coronary stents under schedule-I of Drug (Price Control) Order, 2013. The notification allows NPPA to fix prices of both the bare metal and drug eluting stents (DES). The government notification came five months after it included coronary stents to the National List of Essential Medicines (NLEM), 2015.Here are five things to know about stents and its price control:What is a stent and why is it needed? A stent is a tiny expandable tube shaped mesh to open up narrowed or weakened arteries to prevent chest pains and reduce chances of a heart attack. Doctors place stents in the artery through a less-invasive procedure called angioplasty, performed in a catheterization laboratory known populary as cathlab. Around 25 percent of deaths in India are attributed to cardiovascular disease (CVD). Coronary artery disease (CAD) is the most common CVD accounting for 90-95 percent of all CVD cases and deaths. According to the National Interventional Council (NIC), coronary interventions in India have more than doubled to 248,152 in 2014 from 117,420 in 2010, a result of the surge in cardiovascular diseases.What’s the need to bring stents under price control?Simple – to make stents accessible in a country where health care is largely paid for by the patient, out-of-pocket and only about 3 out of 1000 coronary heart disease patients are treated with angioplasty compared to 32 in the US. To be sure the bulk of the price paid for a stent by a patient goes into margins paid to the middlemen - in this case it is distributors and hospitals. According to NLEM data – the cost of bare metal stent ranges between Rs 25,000 and Rs 75,000, while a drug eluting stent (DES) ranges between Rs 40,000 and Rs 1,98,000. Around 95 percent of the stents used are DES stents. The cost of angioplasty ranges around Rs 200,000-250,000 on average in a private hospital, depending on the complexity of the case, number of stents and types used. The reimbursement limit for angioplasty procedure is Rs 93,000 under Central Government Health Scheme (CGHS).What role did hospitals play in escalating stent prices and thereby angioplasty procedures?NPPA data has put the role of hospitals under scanner for high stent prices. The data shows that the trade margin of distributors for sale to hospital is in the range of 13 to 196 percent, while the margin of hospital to patient is as high as 11 percent to 650 percent. US-based healthcare consulting and information provider IMS Health in a report titled ‘Medical Devices in India—Accessibility, Quality and Pricing’ contended that while stent prices have fallen 30-50 percent in the last four years, the cost of angioplasties have more or less remained the same indicating that hospitals haven't passed the benefit to the patients.What could be the extent of stent price cut possible? NPPA's proposed formulae – could result in DES ceiling price range between Central Government Health Scheme (CGHS) price cap of Rs 22,500 and Rs 67,272 — calculated using the average price to hospital, topped with a 16 percent margin. While patient groups are demanding CGHS price caps – the stent makers urge the NPPA to cap stent prices by averaging the rates at which hospitals buy them. Even going by the option of highest price – a 50 percent cut of stent prices is expected. But the tricky part for NPPA is to do a balancing job involving improving patient access to stents without blocking new innovations to those who can afford and ensuring viability of the stent industry.What’s the take of patient groups and industry bodies on price control?Patient access group such All India Drug Action Network (AIDAN) opposed to the formula provided by the industry which, it feels, is based on inflated and unverifiable data and accepting it would mean legitimizing unethical distribution practices. However, stent manufacturers prefer price to hospital formula and are against adopting CGHS price cap – which could make industry unviable. “Medical Devices are more complex than drugs and therefore, adopting, an appropriate pricing mechanism is key ensuring the continued availability of new and efficacious medical technologies for Indian patients,” said Advanced Medical Technology Association (AdvaMed), an international lobby group for the medical devices industry in a statement. “Policy measures need to achieve a balance between the patient need for affordability and availability of physician choice to broad treatment options to address complex disease conditions.” the body.Advamed represents multinational companies such as Abbott, Medtronics, Meril Lifesciences and Boston Scientific. MNC’s have around 60 percent market share of India’s stent market which is valued at around USD 531 million in revenues by 2016-end.