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September 15, 2014
The government has a Telecom Regulatory Authority of India (TRAI) to regulate prices of telephony, an electricity regulator to control power prices and so on. But India has no body to ensure that medical device companies do not overcharge patients. The result is loot.
Most patients are forced to pay anything between Rs 60,000 and Rs 1 lakh or more for cardiac drug eluting stents (DES) though the same stents cost Rs 28,000-Rs 48,000 even in rich European countries and the UK, where there is price control or a fair pricing mechanism for medical devices.
As senior doctors pointed out, almost all the over-priced stents are imported and hence the government has the bill of entry giving the price at which the stent is being imported, typically a third of the price charged to patients or even less. Yet, the government has done nothing to stop companies and hospitals from looting patients.
The Food and Drug Administration (FDA) of Maharashtra had done a detailed investigation into the overcharging of various medical devices including stents and had submitted the report to the National Pharmaceutical Pricing Authority (NPPA) over a year back, recommending that medical devices including drug eluting stents be brought under price control. The FDA’s report included pricing details of other devices too such as cochlear implant, bone cement and orthopaedic implants and pointed out that the price of most devices was hiked by over 100% at least.
The Maharashtra FDA report cites the example of drug eluting stents manufactured by Abbotts Vascular Devices Holland BV, a Holland-based firm. These stents were imported into India by Abbotts Healthcare Pvt Ltd at Rs 40,710 and sold to the distributor Sinocare at Rs 73,440 against a marked MRP of Rs 1.5 lakh. The distributor then sold it at Rs 1.1 lakh to Hinduja hospital, which in turn charged the patient Rs 1.2 lakh, a near three-fold jump over the import price.
Medical devices including drug eluting stents, orthopedic implants, disposable syringes, ocular lens and heart valves are notified as drugs under the Drugs and Cosmetics Act, 1940 but not included under the Drug Price Control Order (DPCO). Hence, their prices are neither monitored nor controlled. The multinational companies that dominate the market import the devices and mark MRP at whatever level they think the market can bear in the absence of any regulation. These devices even get customs duty concessions, the duty on cardiac stents being zero.
The NPPA has neither replied to the Maharashtra FDA after the report sent over a year ago nor has taken any action on pricing. When contacted, NPPA chairperson Injeti Srinivas told TOI that he was not aware of the FDA report as he had joined recently (in June this year) and that he would look into it.
“If the government was serious about doing something, it would have brought in price control as is done in even rich Western countries. The government knows this is happening because they can see the huge difference in cost between the import price and the price at which these devices are being sold to patients even in government hospitals. They just choose to close their eyes to this,” lamented a senior doctor in a government hospital.