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Maha FDA writes to NPPA to bring medical devices under DPCO to curb profiteering

Shardul Nautiyal, Mumbai
Tuesday, July 22, 2014, 08:00 Hrs  [IST]

Maharashtra Food and Drug Administration (FDA) has recommended to the Drug Controller General of India (DCGI) and National Pharmaceutical Pricing Authority (NPPA) to bring medical devices including drug eluting stents (DES) under the Drug Price Control Order (DPCO) 2013 to make it affordable to the patients.

Medical devices including drug eluting stents (DES) are notified as drugs under the Drugs and Cosmetics Act, 1940 but is not included under the DPCO. Therefore, the prices of medical devices cannot be monitored and controlled as of today.

The recommendation comes in the wake of studies conducted by the FDA which has revealed that manufacturers in connivance with importers, distributors and hospitals are fixing the MRP of medical devices arbitrarily which is then passed on to the gullible patients. It was observed from the studies that the Maximum Retail Price (MRP) of the imported drug eluting stents is exhorbitantly high and patients have no option to bargain.

FDA, therefore, recommends that in order to monitor and control the prices of medical device including DES, the term medical device including DES should be included under the new DPCO regime.

The MRP of DES is fixed by the importing company. As the manufacturers of these devices are located overseas, it is difficult to study the manufacturing cost and export prices of these devices. Besides this, the startling fact is that the cost of DES is immediately recovered from the patients but payments to the distributors are made after a period of 60 to 120 days. The payments of applicable taxes of the concerned sale transactions, to the state government are made only within 51 days by the distributors.

The study showed that DES manufactured by Medtronic Inc and imported by India Medtronic Pvt Ltd, Bhiwandi in Thane at Rs.30,848 has a MRP of Rs.1,62,000. This was sold to a distributor Bhalani Biomedicals Pvt Ltd, Mumbai at a price of Rs.67,000. The said distributor sold this DES to Jaslok Hospital, Mumbai at a price of Rs.1,06,050 which was passed on to the patient.

In yet another case of profiteering, DES manufactured by Abbott Vascular Devices Holland BV at Netherlands and imported by Abbott Healthcare Pvt Ltd, New Delhi at Rs.40,710 and having MRP of Rs.1,50,000 was sold to Sinocare, Mumbai at a price of Rs.73, 440. The said distributor sold this stent to P D Hinduja Hospital, Mumbai at a price of Rs.1,13,400 and the patient paid a price of Rs.1,19,070.

DES manufactured by Cordis Inc at GMED Healthcare BVBA Brussels and imported by Johnson & Johnson, Mumbai at Rs 45,115 with MRP of Rs.1,35,000 was sold to Pack Deal, Mumbai at Rs.76,886. The said distributor sold the DES to Jaslok Hospital at a price of Rs.98,800 which was passed on to the patient.

Patients were being forced to pay double or even triple the price for medical devices at hospitals. As most of these are not available in the open market, patients can't check prices and are held hostage by the hospitals, which force them to buy at the price they quote.

However, experts also opine that having an MRP has not prevented profiteering in medicines, with the MRP being fixed high enough to accommodate commissions since there is no limit on what the MRP can be. Moreover, while MRP is mandatory on everything manufactured in India, many devices are imported and escape this stipulation. In most hospitals, if two devices are more or less equal, the choice of which one is used depends on which fetches the hospital a bigger cut.

 

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