As per recent news, the Indian government has brought cardiac stents under the National List of Essential Medicines (NLEM). As per Indian law, the prices of devices included under this list are controlled and capped by the National Pharmaceutical Pricing Authority (NPPA). Prices of cardiac stents will therefore also now be controlled by the authority and it is expected that they will be slashed by 50% immediately.
There are multiple views on this news with varying opinions between the industry and patient associations. We will look at both sides of the coin and then present the overall impact of this announcement on the market.
From a patient’s health perspective, this move is quite bold and favorable. India has a heavy burden of cardiac diseases with nearly 25% of deaths caused by cardiovascular diseases alone. Within cardiovascular diseases, 90 to 95% of the cases are coronary artery diseases, and many of these patients require angioplasties. As a result of this, India has 24% higher stenting procedure volumes than the US. Despite high procedure volumes, access to stenting procedures is still minimal, with only 3 out of 1000 coronary heart disease patients receiving treatment as compared to 32 in the US. Therefore, in light of the current underpenetration of angioplasty procedures, lowering the prices of stents is expected to improve access to care for coronary disease patients.
Now, considering the medical device industry, this move is going to negatively impact medtech MNCs in a big way. Currently, more than 70% of the Indian stent market is captured by MNCs including Abbott, Medtronic, Meril Lifesciences and Boston Scientific. With the imposed price cuts, there will be less room for launching innovative stents in the Indian market. As a result, the most advanced classes of drug-eluting and bioresorbable stents will be specifically impacted. For companies like Boston Scientific, which recently opened its new R&D centre in India, price controls on stents are expected to impact its production and business plans for India in future.
Overall, this move has created a lot of uncertainty in the Indian medical device market. On one hand, the government is taking initiatives to classify medical devices as a separate industry. On the other hand, it is controlling the prices of stents under the NLEM that includes drugs, sending mixed messages. The Indian government thus faces the dilemma of increasing access to medical devices versus creating conducive market conditions for medical device players.
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