By SOMALARAM VENKATESH MD
With a stated intent of bringing social justice and financial relief to hundreds of thousands of patients undergoing coronary angioplasty in the country every year, the Government of India capped the sale price of coronary stents in Feb 2017. Stent prices fell by as much as 80% with this populist move, seen as anti-trade within the industry circles. It is tempting for a practising interventional cardiologist to look at two years of this government control on medical device prices in a market economy.
Before price-capping, angioplasty patients were indeed getting a raw deal. There was no uniformity in price among stents of similar class/generation made by different manufacturers. The cost of the only bioabsorbable stent then available in India, to the patient, was 200,000 Indian Rupees (a little under USD 3000), whereas the US or European-manufactured (“Imported”) drug eluting stents (DES) would cost anywhere between INR 85,000 to 160,000. Stents manufactured within India (“Indigenous”) were cheaper. The real cost of manufacture or import was hidden from public view. It was left to the eventual vendor, with alleged involvement of the user hospitals, to determine the Maximum Retail Price (MRP). It was speculated that a huge margin was worked into it, and the profit was split between manufacturers, distributors, and hospitals. Allegedly, some unscrupulous physicians received kickbacks for implanting these devices. Even in government-run hospitals, foul play was suspected.
By a single stroke of the pen, Prime Minister Narendra Modi government slashed stent prices substantially. The bioabsorbable stent cost, to the patient, was capped at INR 60,000 (< USD 1000). Bare metal stents (BMS) and Drug-eluting stents (DES) were capped at INR 7500 and 30,000, respectively. The government seemed to have done its homework: these figures were arrived at from industry-supplied figures on manufacturing or import costs. The cosy network of coronary stent food chain was set on fire with this move: with sudden diminution of profit margins, it was feared that multinational companies would cut Indian workforce; stent distributors & vendors (especially small vendors) were expected to be wiped out or cut in size; doctors worried that with low profitability, multinational stent manufacturers would exit the country or at least, stop importing newer technologies; and hospitals feared revenue loss.
Following this, Industry and Hospital-chain representatives are said to have had series of discussions with the government. Rumours were that the Central Government was arm-twisting traders and that it would relent and raise price limits after these ‘talks.’ The National Pharmaceutical Pricing Authority (NPPA) promised a price revision, one year after the price cap. Meanwhile, some multinationals informed the government that they would withdraw some of their ‘top-end products’ from the Indian market, citing financial nonviability, obviously to put pressure on the government. The Bioresorbable Scaffold from Abbott actually disappeared from Cath lab shelves.
Come February 2018, the much-awaited price revision was announced. To the utter shock of most people, stent prices were cut further by about 10%. A pallid gloom descended on interventional cardiology as a whole. Government was labelled anti-industry and the PM, populist. Pundits predicted that all the ‘good’ stents will disappear from the Indian market, which would then be flooded by low-quality goods. Two years after the Indian government’s ambitious move, it is interesting to see the impact it has had on different players: industry manufacturers, hospitals & doctors and finally the patients.
In terms of numbers the industry hasn’t really done badly. Predictions were that angioplasty numbers would dwindle due to shortage of quality stents once multinational companies exit. There were fears of reverse medical tourism: affording Indian nationals would flee the country for their coronary procedures. Alternatively, some pessimists felt there would be too many angioplasties due to more affordable procedure cost. None of this really happened. Previously, total number of angioplasties had grown annually by 8-12%. A similar growth trend has continued in the two years subsequent to the capping.
However, one significant change was in the proportion of imported versus indigenous stent use. Industry, as well as India’s National Interventional Council data show that the share of Indian stents – distributed as well as actually implanted – has gone up anywhere between 10-20%, at the cost of imported stents. One Chinese company, which hitherto had very little presence in India (despite proven non-inferiority of its stent against the US-made market-leader) has started to grow its footprint after the price cap.
This, to me, was the most interesting fallout of price capping: First off, if all stents cost the same, and if the government capped the trade margin uniformly at 8%, why should sale of Indian stents go up? In the days when the imported stents cost many times that of Indian stents, they were clear market leaders. Now, with no difference in price, shouldn’t we be choosing FDA approved US-made stents, with better track records and larger published experience over the FDA unapproved Indian ones? Therefore, one suspects that there is perhaps a hidden incentive to hospitals/physicians for making this choice. If indeed this was true, and if it is an underhand financial arrangement, it is a pity. Because, India has then lost a great opportunity to clean up the stent scene in its run up to ‘Make in India’ in medicine.
Second, regardless of the reason for the shift, the Indian stents seem have fared pretty well. Certainly, interventionists have encountered problems during delivery of the stents into coronary lesions. Stiffer, less flexible stents, rough-cut delivery systems that render procedures challenging, larger balloon overhang beyond the margins of the stents mounted on them, leading to edge-dissections on high pressure deployment and delayed/non-deflation of stent balloons after deployment – all of these increase the degree of difficulty of stenting procedure by several notches. But, Indian cardiologists, have displayed an uncanny ability to overcome these issues by employing the famous jugaad (= clever resourcefulness): use of guide-catheters with better back-up, extra-support guidewires, buddy wires and hardware such as Guide Liner™ have all been employed to increase stent delivery chances.
Once delivered successfully, the fear that there would be higher stent failure rates with indigenous stents (the main reason offered to patients earlier while pushing imported stents) hasn’t come true. Both in the immediate and medium-term, Indian stents seem to perform pretty well, at least going by the word in the cardiology community.
Whether implanters will continue to choose indigenous stents, will depend on how well the Indian companies handle post-marketing problems. India has no great history of post-marketing surveillance. If companies do not address problems due to stent or balloon design, and up their R&D ante seriously, as the western manufacturers did at the beginning of the DES era, cardiologists may turn back to the FDA approved stents because of cost parity. This space will be the one to watch in the whole scenario.
For the patients, the story didn’t pan out quite as well. Most private hospitals hiked up the procedure costs to offset the losses they had. Hitherto, with the price mark-up on the stents contributing to per-procedure profits, most hospitals managed to keep the procedure cost low between INR 50,000 – 150,000 (USD 750 – 2200). They were able to save procedure costs by reusing catheters and guidewires. About the same time of stent price capping, the Health ministry also engineered a virtual ban on reuse of Cath lab hardware. So, most corporates were forced to double the ‘package charges’ to remain financially viable. Therefore, despite huge cuts in stent price, the patients haven’t really benefited much in terms of procedure cost, except where multiple stents are used in the same case.
The threat that no new technology may get imported due to government control of prices should not really bother either patients or physicians. Angioplasty, except in acute coronary syndromes, really doesn’t have much to show on its own impact on patient care. A large majority of PCIs in India is for stable CAD. There hasn’t been an earth-shattering breakthrough in either this or in the primary angioplasty technology in decades now. Access to a fewer fancy toys is really no big loss.
Stent price capping came abruptly and became an emotional issue for the industry, physicians and politicians. With time, the dust around it is settling down. As the sheen wears off on the invincibility of US and European stents, physicians realize, again, that implanting techniques and post-procedure care matter more than the stent brand. With this, and the ruling party’s potential for using price-capping as electoral propaganda, stent prices are likely to remain low. Indian stent manufacturers have benefitted early in this scenario, which is good for Indian business. However, unless a robust system of reporting and correcting teething technical issues of Indian stents is put in place, they will lose an admirable opportunity to show the way forward to the makers of other medical devices.
One hopes that they live up to the initial promise.