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NPPA extends ceiling price fixation on orthopaedic implants to one more year

Gireesh Babu, New Delhi
Monday, September 18, 2023, 08:00 Hrs  [IST]

The National Pharmaceutical Pricing Authority (NPPA) has extended the ceiling price fixation it imposed on orthopaedic knee implants for knee replacement system for one more year till September 15, 2024. The ceiling price of orthopaedic knee implants has been fixed since August 16, 2017 in public interest. The price notification is currently in force up to September 15, 2023.

The drug price regulator in its recent meeting deliberated upon the matter in detail and examined the requests made by various industry associations and companies highlighting various factors such as fluctuations in foreign exchange; increase in manpower costs, freight cost, wholesale price index (WPI); supply chain problems, etc.

The authority observed that the annual WPI in four years from April 1, 2020 to April 1, 2023 was 1.88468 per cent, 0.53638 per cent, 10.76607 per cent, and 12.1218 per cent, respectively.

The Union ministry of health and family welfare through its S.O. 1468 dated October 6, 2005, notified the orthopaedic implants as ‘drugs’, and the DPCO, 2013, is applicable to all notified drugs (including notified devices). The NPPA is mandated to monitor the prices of these drugs under paragraph 20, so as to ensure availability of such drugs (i.e. notified devices) and also ensure that no unethical profiteering is happening in case of any drugs (i.e. notified devices) at the cost of patients. The non-scheduled medical devices and drugs are monitored under para 20(1) of Drugs (Prices Control) Order, 2013 and the knee implants are non-scheduled devices/drugs.

Under the Para 20(1) of the DPCO, 2013, the Government shall monitor the maximum retail prices (MRP) of all the drugs, including the non-scheduled formulations and ensure that no manufacturer increases the maximum retail price of a drug more than ten percent of maximum retail price during preceding twelve months and where the increase is beyond ten percent of maximum retail price, it shall reduce the same to the level of ten percent of maximum retail price for next twelve months.

It may be noted that the NPPA, following the first notification regulating the prices in August, 2017, extended the regulation almost six times till September 15, 2022.

Extending the ceiling price fixation for one year, that is September 15, 2024 or till further order, whichever is earlier, the Authority said that the ceiling prices shall be monitored as per the provisions of paragraph 20(1) of DPCO, 2013.

"Further, the ceiling price of orthopedics knee implants will be reviewed after a period of one year," it decided in the 116th meeting of the Authority held on September 6, 2023.

In its order on August 16, 2020, NPPA said that it has “noticed that orthopaedic- knee implants are having unjustified, unreasonable and irrational high trade margins leading to their exorbitant prices which affects the out of pocket expenses of patients and lakhs of patients are not able to pay for arthroplasty procedures because of these exorbitant prices and suffering in pain.”

The estimates of such patients requiring arthroplasty intervention, both diagnosed and undiagnosed, is about Rs. 1.5 to 2 crore out of which only about Rs 1 lakh plus well off patients are in a position to pay for it every year. It has also noted that osteoarthritis is likely to become the fourth leading cause of disability by year 2020, as per the WHO Bulletin, 2003,81,(9) and India is likely to be one of the leading countries of such immobilized citizens in terms of numbers. Preventing such a scenario is essential in individual as well as national interest, it said.

In this context, the NPPA carried out an exhaustive stakeholder’s consultation on the issue of exorbitant cost of orthopaedic knee implants and excessive trade margins and analysis of ‘trade margins’ in the market of knee implants was uploaded in public domain for the sake of transparency and in the spirit of people’s right to information.

Following this, the drug price regulator, in its Authority meeting held on August 10, 2017 which continued on August 14, 2017 after duly examining in detail, has decided that it is necessary to control the excessive trade margins for fixing ceiling price of orthopaedic knee implants which is fair and reasonable based on its intrinsic value of the implants with rational margins to protect public interest. This was after deliberating and considering all available information/data/viewpoints and all relevant options for price fixation of orthopaedic knee implants, under present extraordinary circumstances of a failed and exploitative market because of information asymmetry between the patient and healthcare delivery system, it opined.


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