Wide gap between stent MRP and manufacturing cost

While multinational's dissolvable stent is sold at Rs 2 lakh, its import price is Rs 42,125

At a time when the National Pharmaceutical Pricing Authority (NPPA) has proposed reduction of stent prices by up to 50 per cent, Business Standard looks at the pricing dynamics in this industry.
 
While the maximum retail price (MRP) of a stent manufactured abroad and made in India could be similar, starting anything at over Rs 1 lakh, the cost to the patient could vary by a wide margin.
 
“While there is an MRP in the Indian market, at times stents are sold to hospitals at prices much lower, especially in the case of domestically manufactured stents,” an executive said. Indian stent manufacturers often lack the bargaining power as hospitals prefer USFDA-approved stents, he explained.
 
Import data also show that the price at which stents land in India are much lower than the MRP of the product. While a prominent multinational’s fully dissolvable stent is sold at around Rs 2 lakh, its import price is Rs 42,125. Another well-known international stent lands at a price of Rs 74,777, even as its MRP in India is Rs 1.2 lakh. A third MNC’s stents land at a price of Rs 18,271, while the MRP is Rs 1.65 lakh.
 
Landed price is the company’s cost of manufacturing the stent in the country of origin. While there aren’t any customs duties on import of stents, taxes including value-added tax, duties on guide wire and balloons that facilitate angioplasty sum up to around 35 per cent.
 
Estimates suggest that only 40 per cent of the stents manufactured in India are sold in India.
 
In a recent draft proposal, NPPA said prices of drug eluting stents may vary between Rs 21,881 and Rs 67,272. The NPPA is considering five options to fix the price of stents. According to CGHS rates, drug eluting stents would be priced at Rs 22,500. If the average price to distributor is taken into consideration, with a margin of 16 per cent, drug eluting stents will be priced at Rs 27,225. The highest price as per the NPPA’s calculations is the average price to the hospital, with a margin of 16 per cent. Using this formula, the price is likely to be around Rs 67,272.