More reports on: Government policies

Govt invokes special powers to ensure steady supply of coronary stents

22 February 2017

The government has invoked special powers under the Drug Price Control Order (DPCO), 2013 to ensure the steady availability of coronary stents, after the government slashed the prices of stents supplied to heart patients.

The government on Tuesday ordered manufacturers to maintain production, import, and distribution of the medical device, without interruption.

Authorities said that they decided to invoke Section 3 (i) after due deliberations on the current situation (reports of shortage of stents since price ceiling) and alternatives available with the government to resume normal supply of coronary stents.

According to Section 3 (i) of DPCO, ''The government may, with a view to achieve adequate availability and to regulate the distribution of drugs, in case of emergency or in circumstances of urgency or in case of non-commercial use in public interest, direct any manufacturer of any active pharmaceutical ingredient or bulk drug or formulation to increase the production and to sell such active pharmaceutical ingredient or bulk drug to such other manufacturer(s) of formulations and to direct formulators to sell the formulations to institutions, hospitals or any agency as the case may be.''

''Manufacturers have been directed to maintain production, import, and supply of the medical device. They will also have to submit a weekly report on coronary stents produced and distributed besides a weekly production plan to National Pharmaceutical Pricing Authority (NPPA) and Drug Controller General of India (DGCI),'' Barnali Khastgir, Under Secretary (DPCO Pricing), Department of Pharmaceuticals stated in an order.

''NPPA and DCGI are also empowered to extend these directions to any other producers of coronary stents in India during the three-month period. This order will be valid for next six months, and NPPA and DCGI will recommend withdrawal or extension as the case may be, two weeks before the expiry of the period,'' Khastgir stated.

The government last week brought down the cost of coronary stents by around 380 per cent, after an analysis of the margins or profit of various players involved in the stents trade, NPPA has found that they were ''exorbitant and irrational'', indicating ''vulgar profiteering'' by every player but mainly by the hospitals. While the average maximum margin for manufacturers on a commonly used drug-eluting stent (DES) was 27 per cent, the distributors and hospitals were earning an astonishing average maximum margin of 196 per cent and 654 per cent on it, respectively, according to The Indian Express report.

The Government on 14 February reduced prices of coronary stents by up to 400 per cent, capping them at Rs7,260 for bare metal ones and Rs29,600 for the drug eluting variety (See: India slashes stent prices by up to 85%; cap at Rs30,000). ''The level of average margins ranging between maximum 436 per cent (for BMS) to 654 per cent (DES) at the level of hospitals indicated a failed market system where asymmetry of information has resulted in unethical practices…,'' the NPPA noted.

The maximum trade margin for distributors was found to be 194 per cent for BMS and 196 per cent for DES. ''In comparison, the margin at the level of manufacturers / importers was modest, in terms of average maximum of 56 per cent (for BMS) and 27 per cent (for DES),'' the NPPA stated.

The centre looked at this step as a major action on the unethical margins charged at each stage in the supply chain of coronary stents.

The government has said that the new prices are not likely to make much adverse impact on industry, however, the industry has shown unrest over the decision.

Now the ceiling prices of Bare Metal Stents (BMS), that have a 10-per cent market share, have been capped at Rs7,260 and Drug Eluting stents (DES), that have a 90-per cent market share, at Rs29,600. These prices are exclusive of VAT and other local taxes. Since most states have five per cent VAT on stents, the maximum retail price of BMS and DES would be Rs7,623 and Rs31,080.

Based on price reduction, patients will get average benefit of Rs80-90,000 per stent, resulting into a gross relief of Rs4,450 crore in one year.

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