More scrutiny likely on stent suppliers

MCA probe indicates pricing nexus with hospitals, forcing patients to pay unjustified amounts

Stent manufacturing companies might face price caps and other rules and regulations if action is taken on a recent report by the Ministry of Corporate Affairs (MCA)'s cost audit branch. It has pointed to a nexus among hospitals, cardiologists and stent suppliers.

"There appears to be (such a) nexus...as private hospitals charge different rates for the same DES (drug-eluting stents)," the report said. It also noted some hospitals make hefty profits through "commission and kickbacks" by resorting to "monopolistic practices" and "unduly" forcing patients to pay a higher price.A DES is placed into a narrowed or diseased artery, slowly releasing a drug to block cell proliferation. This prevents fibrosis, which, with clots (thrombus), could otherwise block the stented artery, a process called restenosis. Prominent medical device manufacturers include Abbott, Medtronic and Boston Scientific. There are various other small domestic manufacturers, too.

According to trade sources, imported stents are priced at Rs 85,000 to Rs 1 lakh, whereas indigenously made ones are at Rs 25,000 to Rs 40,000. However, hospitals get better pricing through direct bulk purchase.

Last year, the government slashed the reimbursement for DES under the Central Government Health Scheme by Rs 40,000, capping it at Rs 25,000. Earlier the government had differentiated pricing for DES for CGHS beneficiaries, depending on the standard of approval.

According to the earlier policy, the health ministry paid Rs 65,000 for all DES approved by the Drugs Controller General of India and the US Food and Drug Administration. For those approved by CE (Europe), the government reimbursed Rs 50,000, while for indigenously manufactured ones, the reimbursement was Rs 40,000.

However, there are no such regulations for hospitals. The report by MCA's cost audit branch has suggested a need for more research into the matter and regulations to address the disparity.The industry is divided. Domestic suppliers say it is important to address the existing nexus and malpractices by doctors and hospitals. Multinational entities argue the price disparity is because of the quality and latest technology used in imported stents, missing in domestic products.