India: NPPA Revises Coronary Stent Price After A Year Of Price Cap

The National Pharmaceutical Pricing Authority (NPPA) is under constitutional obligation to provide fair, reasonable and affordable price for Coronary Stents and to check unethical profiteering and exploitive pricing. In order to protect public interest in extraordinary circumstances under paragraph 19 of the Drug Pricing Control Organization (DPCO), 2013, NPPA fixed the ceiling price of cardiac stent for the first time and notified the same vide S.O. 412 (E) dated February 13, 2017 for a year⁴.

NPPA, further in various meetings and discussions with expert committee and all concerned stakeholders/ organizations against the concerns of sub-classification of drug eluting stents (DES), rewarding incremental innovation, an upward revision or no change in the ceiling price in ceiling prices, increase in trade margins and freedom to withdraw unviable brands from Indian market, has observed some key points that:

• There was an increased indigenous manufacturing activity and enhanced imports and availability of cardiac stents made in India in year 2017. There was a clear overall 5% growth in the indigenously manufactured stents.
• The year 2017 witnessed an overall marginal increase of 1% in imports of stents from US based manufacturers while as much as 35% increase in imports of stents from non-US manufacturers was seen.
• The year 2017 also saw entry of some new companies, both Indian and foreign like USA, Singapore, Spain, China and UK having its manufacturing primarily in UAE, in the market.
• The decision of putting only 8% trade margins cap eliminated almost all unethical payment and profiteeringin the system and also disrupted status quo in trade of stents which was based on profiteering at each level.

NPPA finally concluded that cardiac stents are an essential drug under Schedule I of DPCO, 2013 and part of NLEM, 2015 and have paramount importance on public health. Therefore, the category needs to continue to be kept under price regulation in larger public interest⁵.

Further, on February 12, 2018⁶, NPPA revised the ceiling prices of drug eluting stents (DES) to Rs 27,890 from Rs. 29,600, while marginally raising the cap on bare metal stents to Rs 7,660 from Rs 7,260 as listed below:

Trade margin & GST on revised stent price:

GST: The manufacturers may add goods and services tax and no other charges in the calculation of MRP, if they have actually paid such taxes or if it is payable to the Government on the ceiling price specified in the above table.

Trade margin:

The revised ceiling prices are inclusive of 8% maximum permissible trade margin which is sacrosanct and no additional charge whatsoever, over and above the ceiling price specified hereinabove, in the price notification shall be charged from the consumer/patient except applicable goods and services tax, if any, paid or payable. Trade margin in excess of 8% specified above, in whatsoever form, shall be construed as 'violation' and whoever is involved in such transactions, jointly and severally, shall be liable to appropriate action including prosecution, for violation of the provisions of the DPCO, 2013 under the Essential Commodities Act, 1955.

Monitoring Price of Essential Accessories used during angioplasty

Various accessories like cardiac catheters, balloon catheters and guide wires are integral part of the angioplasty package and are necessarily used during angioplasties. NPPA took serious note of trade margins of these essential accessories and decided further monitoring of their respective MRPs not only on the basis of manufacturer's data but also the retail usage data.

NPPA directed all healthcare institutions, which are performing angioplasty and billing the patients, to mention cost of cardiac catheters, balloon catheter and guide wire separately along with their respective brand name, company name, batch number and specifications in order to bring in greater transparency in the billing and monitoring of compliance with the MRPs set by the NPPA under Para 20 of DPCO, 2013.

Industry compliance with revised ceiling price

The revised ceiling price as specified above shall be applicable from February 13, 2018, and shall also be applicable to all the stocks of coronary stents including "Covered coronary stents "available for sale in the trade channel. In this regard –

• All manufacturers/marketers of above coronary stents are advised to revise the price of all such stents, plus goods and services tax as applicable and paid, if any.
• The manufacturers under Paragraph 24 of DPCO, 2013 shall issue price list in Form–V to the NPPA through online Integrated Pharmaceutical Database Management System (IPDMS) along with a certified hard copy, and submit a copy of the same to all the State Drug Controllers and all its distributors/dealers/ cardiac healthcare institutions performing angioplasties.
• All the manufacturers will continue to ensure the availability of all the brands of coronary stents and ensure that no disruption is caused in the supply chain.
• Every distributor, dealer and institution shall display price list and the supplementary price list, if any, as furnished by the manufacturer/importer, on a conspicuous part of the premises where he carries on business including its publication on its website.
• Since cardiac catheters are necessarily used during angioplasties and are integrated part of the angioplasty package; healthcare institutions which are performing angioplasty and billing the patients, shall also mention cost of cardiac catheters, balloon catheter and guide wire separately.
• No healthcare institution, such as hospitals/nursing-homes/clinics performing angioplasty procedures using coronary stents, shall solicit any patient to purchase coronary stents from it, in case, the patient is interested in procuring such stents from any other third-party sources.

Note:

• Any manufacturer intending to discontinue production or import of any Coronary Stent shall furnish information to the NPPA, in respect of discontinuation of production and / or import in Form-IV of Schedule-II of the DPCO, 2013 at least six months prior to the intended date of discontinuation as prescribed under paragraph 21(2) of the DPCO, 2013 and follow the ceiling price in such manner and till such a time prescribed by the Government.
• The revised ceiling price hereinabove shall be applicable till March 31, 2019, unless revised by another notification.

Footnotes

4. http://www.nppaindia.nic.in/ceiling/press13Feb2017/so412e-13-02-17.pdf

5. http://www.nppaindia.nic.in/minutes/minutes-2017-18/Authority_minutes.pdf

6. http://www.nppaindia.nic.in/order/revised_prices(coronary-stents).pdf

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