Govt must play active role in reducing healthcare costs

On February 13, the National Pharmaceutical Pricing Authority (NPPA) made a historic decision of fixing the ceiling prices of Bare Metal Stents (BMS) at Rs 7,260 and Drug Eluting Stents (DES) at Rs 29,600 under Paragraph 19 of the Drug Prices Control Order (DPCO) 2013 that empowers the government to fix the price of any medicine to protect the public interest. This action of NPPA is the result of a long standing demand from the public interest groups and individuals as well as state drug regulatory agencies.

The decision puts an end to the exorbitant pricing of coronary stents. Patients were previously charged anywhere from Rs 55,000 to Rs 2,00,000 for a drug eluting stent, reflecting a price increase of up to 2,000% from the cost of the stent. The NPPA has also clarified that the ceiling price does not include any margin for the hospitals thereby putting an end to the exploitation by hospitals.

In its detailed note on ceiling price fixation of coronary stents, the NPPA spelled out the negative scenarios that may follow price fixation such as “disruption in supplies, non-essential multi-stenting during angioplasties, increased performance of bypass surgeries, increased cost of cardiac procedures, prolonged unnecessary stay in hospitals or increase in doctors’ fees or procedure charges.”

Over the last few days, reports have emerged that hospitals are devising various strategies to compensate for their loss of income by hiking the charges of angioplasty procedures and other devices used in an angioplasty, which are not under price control. Not unexpectedly, certain well-known cardiologists working in the private sector hospitals and health entrepreneurs have critiqued the decision stating that the NPPA decision would deny access to new and innovative DES for Indian patients. Further, they also said that stent manufacturers will withdraw all “advanced” stents from the market and the patients will be left with old generation DES.

To date, no evidence of clinical superiority of one stent model over another has been submitted to the NPPA which leaves all DES at par in terms of clinical outcomes. Moreover, these cardiologists seem to be oblivious to the fact that creation of a situation of artificial scarcity of high-end stents by manufacturers in cahoots with hospitals violates several provisions of the DPCO and carries severe penalties, including legal prosecution.

However, the overcharging of angioplasties to compensate for loss of revenue to hospitals prevents the full benefit of price control going to the patients. It exposes the lack of a regulatory framework to control the behaviour of private hospitals. Since the vast majority of people are dependent on the private sector for the critical health care services such as angioplasty, urgent government intervention is warranted. In order to ensure peoples’ enjoyment of the benefit of price control on stents we list down the following governmental interventions.

The first step is for the government to examine the costs associated with angioplasties holistically and to check the exorbitant prices of auxilliary surgical devices such as balloons, catheters, guide wires etc, and to take price control measures. These devices should also be treated as essential medicines. Second, the Health Ministry must frame and implement the standard treatment protocols for cardiac interventions to ensure rational treatment to prevent unwanted interventions with profit-maximising strategies.

Public health facilities

Further, there are not enough public health facilities to carry out coronary angioplasty in the public sector. This situation gives undue power to the private sector to be non-compliant with the government decision and devise creative strategies to torpedo price control. Therefore, there is an urgent need to expand angioplasty facilities at tertiary care-level public hospitals with at least two such facilities in every district.

The availability of stents at affordable cost enables the government to procure stents at cheap price and offer free angioplasty at the public hospitals.

Towards this direction, there is an urgent need for appropriate training of doctors and medical personnel along with infrastructure for procedure and post-operative care. State governments should undertake public procurement for coronary stents for use in public hospitals with standard tender specifications that do not create illegitimate barriers for manufacturers of indigenous stents to participate in public procurement.

Finally and of crucial importance, the Ministry of Health and Family Welfare must implement the centrally standardised rates for medical procedures under the Clinical Establishments Act (CEA), 2010 and Rules, 2012. These rates should be applicable for all states which have adopted the CEA. States which have not adopted the CEA at the state-level must be encouraged to do so. In the coming days, the government needs to play an active role in reducing the healthcare costs. As India’s medical devices scene is dominated by foreign manufactures, there is a need to achieve self sufficiency. The government should align trade, investment and technology policies to promote domestic production of medical devices.

Often, doctors recommend foreign manufactured devices even in the presence of domestically manufactured competing products. Doctors indulge in scare tactics with patients and their families citing quality differences. The government must, on the one hand, strengthen its regulatory apparatus to ensure quality, and on the other, educate consumers about the false scares of domestically produced devices.

(The writers are with the All India Drug Action Network)