The Union government’s decision to slash stent prices provides tremendous opportunities for companies having quality products to penetrate market with innovative strategies and garner market share. As the trade practices will be streamlined now, the top and bottom lines of companies will improve significantly, tells Swaminathan Jayaraman, Chairman and Managing Director, Vascular Concepts in an interview with Nandita Vijay. Excerpts:
How do you see the new stent pricing regime to impact the top and bottom lines of companies?
The new pricing has equalized business opportunities and has brought about a level-playing field for all companies which did not exist earlier. This provides a tremendous opportunity for companies which have quality products to penetrate market with innovative strategies and garner market share. I expect the top and bottom lines of the companies to improve significantly as the trade practices will be streamlined now.
Do you see a rationalisation in the stent pricing from a company perspective?
The current NPPA decision has rationalized the stent pricing for companies, hospitals and most importantly the patient. From a patient’s perspective, he now has a very clear knowledge of the pricing of the stent which the hospital will offer. He can make a choice based on his comfort as to the hospital environment he wants to get the procedure done. The government’s has made an educated and merited decision after studying the various models of cardiac care prevalent all over the world. In 2007, even though India conducted more stent procedures than China, it has overtaken our country. Today China is ranked No. 1 market in Asia due to their emphasis on pricing and universal health care. India will now follow the same trajectory which will bring tremendous rationalization to the market.
How is the Pronova brand faring in the Indian market?
Pronova as a brand is one of the most reliable in the hands of cardiologists. The product has been in the market since 2004 and has had excellent results in patients. This has provided us growth, year after year and has been the stent of choice for over 1,000 cardiologists in the country. We as a company have always delivered products that are abreast with latest technology and superior class, but at prices affordable to our Indian populace.
Do you see it more viable for stent companies to increase their focus on the developing markets?
All the developing markets surrounding Asia have announced decisions similar to the NPPA to restrict the pricing of the stents in the respective markets, like for instance Sri Lanka, Bangladesh and Thailand. This provides a great opportunity for companies that are providing good quality products to focus on the developing markets.
How does Vascular Concepts view the competition in the stent market in India and globally?
The stent market globally can be divided into two parts: the highly-regulated and reimbursed market and the semi-regulated and partially-reimbursed business segments. The market for Vascular Concepts and other Indian companies is the semi-regulated and partially reimbursed markets where pricing and quality play a key factor in the growth of the business. In regulated markets of Europe, Japan and USA, it is still too early for either us or for any Indian medical device company to enter the region. Even China which is India’s competitor, after garnering considerable market share locally, has not been able to penetrate the regulated markets despite being backed by enormous capital.
What are the visible trends in stents in terms of technology?
There are two main areas for the launch of innovative products in the future. With angioplasty and stenting extending lives of the patients, the heart needs to be taken care for any structural issues. The valves in the heart need to function normally for the rest of the heart to support the bodily functions. We have launched a slew of structural heart products in the last couple of years and will continue this with the new Transcatheter heart valve where the Aortic Valve can be replaced with a catheter. There is also considerable initial efforts to look at whether the Mitral and the Tricuspid valve replacements can also be done percutaneously specifically for heart failure patients. We are also developing a device to prevent strokes in patients that suffer from irregular heartbeat.
The second area of focus is the Peripheral Endovascular Technologies, focusing on treatment of debilitating diseases in the lower abdomen of the body. There are a number of patients specifically diabetic, who suffer from reduced mobility due to irregular or improper blood flow in the limbs which lead to claudication and eventually amputation. Newer technologies like drug-eluting balloons, self-expanding stents and stent grafts can potentially tackle these diseases in future, which is the focus of Vascular Concepts.
Which of the segments: coronary stents, peripheral stents and heart devices are the key revenue generators to fuel the growth ?
Currently, it is a mix of all products with coronary stents providing the major revenue for the turnover. We see this changing over the next several years, where the structural and peripheral devices can provide greater turnover than the coronary stents.
Could you share details of any ongoing clinical trials with your products?
We are presently pursuing a Phase III clinical trial with our upcoming product, HYDRA TAVI which is a transcatheter aortic valve implantation device. Its use involves a minimally invasive surgical procedure to repair the aortic valve without opening up the patient’s chest. We are currently enrolling patients with several aortic valve diseases to complete this trial. We will also be commencing a trial shortly on a device which can prevent strokes in patients with irregular heartbeat.
How large is your team and what are your hiring plans for this fiscal?
There are 200 employees at Vascular Concepts. Our recruitment is usually dependent on many criteria such as expansion of a territory, new customers within an existing market needing more people to cater to them, etc. Our plan for this fiscal is to penetrate the market by hiring more sales managers in rural areas where growth of the business is focused.
What are the developments planned for 2017-2018? Is the company looking for funds to fuel its next phase of growth?
Apart from the transcatheter heart valve, our efforts are to look into Mitral and the Tricuspid valve replacements. Besides we would pursue our ongoing developments to create a device to prevent irregular heartbeats. We have recently brought in a stent for endovascular treatment of coarctation of the aorta. We shall also be introducing our TAVI device to the Indian market very soon, for those patients who are considered to be at high-risk for open heart surgery. However, we are currently not looking for funds to fuel our next phase of growth.
Could you provide the key takeaways of the company’s CSR initiative of ‘Heart Insure Programme’?
It has always been our objective to provide valuable service after treatment of diseases to our patients. Heart Insure Program is one such initiative. We provide patients with guidance on diet and post-operative healthcare through timely telephonic follow-ups. We also organize one-to-one patient-cardiologist meetings through health check camps. Here, patients get to interact with cardiologists and fellow patients to learn from them about the lifestyle changes which are vital to combat the progression of the disease. We also provide an insurance coverage to the patient in case of the unfortunate progression of the disease at the site of the stent deployment.