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Makers of medical devices advocate price regulation to curb profiteering by hospitals

Shardul Nautiyal, Mumbai
Tuesday, April 28, 2015, 08:00 Hrs  [IST]

Even as dealers of cardiac and drug eluting stents (DES) are known to offer hefty amounts as incentives to doctors and hospitals, manufacturers beg to differ and point out that what patients pay is based on what hospitals are charging and it is not that the companies are making huge profits.

Their share of the market remains low despite these firms selling their stents in many European and South East Asian countries.

Says a medical device manufacturer on conditions of anonymity, "As per the current provisions of the Drugs and Cosmetics Act, 14 medical devices are regulated as drugs. Medical devices are very different from drugs and pharmaceuticals. Bracketing devices as drugs has posed unique challenges to the manufacturers, importers and distributors in India.

"These challenges are not limited to registration for manufacture and import with the Central Drugs Standard Control Organization (CDSCO) and extend to other related administrative and regulatory departments dealing with reimbursements, taxation, price control, provision of services and training of healthcare practitioners."

According to a recent report from a state regulatory authority, the margin between the import price and the final price paid by patients is huge enough to accommodate the cost of these large incentives offered to hospitals and doctors.

The magnitude of profiteering in the medical device business can be gauged from the fact that the number of cardiac stents being implanted in India has almost doubled in the last five years, according to data collected by the National Intervention Council (NIC) registry of the Cardiological Society of India (CSI). The number of drug eluting stents used almost tripled in the same period.

Patients spend about Rs.2,500 crore on cardiac stents alone every year in India even by conservative estimates, the bulk of it being paid from their own pockets. This does not include the cost of blood tests, angiography, procedures, charges for hospital stay, doctor's charges and so on.

Annually, the stent market is estimated to grow by about 15 per cent, with the growing incidence of cardiovascular diseases. Industry sources estimated that though the share of DES was around 78 per cent in 2013, it would have gone up to over 85 per cent in 2014. In that case, the total number of DES sold in 2014 would be about 3.5 lakh. If the average price being paid by patients for a DES is taken at about Rs.65,000, the total expense on DES alone would have been approximately Rs.2,275 crore.

The Union health ministry has fixed Rs.23,625 as the price of a DES under various government schemes. If DES was available to everybody at this price, that would cost just Rs.827 crore, a saving of almost Rs.1,450 crore each year. Even if they were all priced at the imported price of about Rs.40,000, the total expense would be just Rs.1,400 crore, a saving of over Rs.800 crore.

Concludes an expert, "The only medical device known in the past is Stethoscope. Now we use many medical devices. Around 80 per cent of the medical devices used like PET Scan, CT Scan, Ultra Sound etc are imported. Why can't these be manufactured locally. Why can't pharma companies hire Indian doctors to develop medical devices indigenously. The imported devices must be phased out slowly to be made locally to further use them, perfect them and then also export them gradually."


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