Margins on orthopaedic implants as high as 300% of landed price

After capping the prices of cardiac stents and proving that huge margins at various levels of the supply chains is why the prices of stents were sky high, the National Pharmaceutical Pricing Authority (NPPA) has started monitoring the prices of other medical devices as well.

A recent report is on the margins in the supply chain for various orthopaedic implants. NPPA says the average margin on a full set of orthopaedic implants seems to be 313 per cent. The total trade margin is essentially the Maximum Retail Price (MRP) minus the import price. In this, distributor and hospital get a margin of 335 per cent; the company importing these implants earns a margin of 76 per cent.

NPPA put orthopaedic implants into four categories — femoral, tibial plate, insert and patella. The total margin in the case for femoral implants is 287 per cent. That to distributor and hospital is 120 per cent; the importer gets 76 per cent.

The margins for tibial plate and patella are on the same lines. For the former, the importer gets 67 per cent, while distributor and hospital get 137 per cent. Tibial plants can cost a patient anywhere between Rs 20,000 and Rs 122,336. The distributor buys at prices between Rs 7,538 and Rs 46,555. These are imported at a price anywhere between Rs 8,352 and Rs 17,492.

Patella implants can cost a patient anywhere between Rs 4,000 and Rs 17,900. The price to the distributor is between Rs 675 and Rs 5,807, while the landed price is between Rs 1,178 and Rs 4,748. Almost the same type of margins are maintained in the case of femoral implants.

The margins for inserted implants are higher than in any other category. Total trade margin is 449 per cent. Distributor and hospital get 163 per cent. The minimum retail price is Rs 9,091, while the MRP is Rs 103,700. The landed price is Rs 3,263 and Rs 14,071.

Apart from orthopaedic implants, state Food and Drug Administration (FDA) have done studies on other devices. These show hospitals sell oxygen bags at 300 per cent more than what they procure at. Urinary bags are sold 500 per cent higher.

The trend is the same for intraocular lenses. The difference between the price to the hospital and the MRP is between 200 per cent and 300 per cent.