After rejecting the multinational medical device manufacturers’ request for a sub-category of new generation coronary stents, the National Pharmaceutical Pricing Authority (NPPA) has further asserted its position. In a move cheered by the domestic manufacturers, the regulator has decided not to stop any manufacturer or importer of coronary stents from pulling out of Indian market.
According to a circular issued by the pricing authority on February 22, the companies will be allowed to discontinue production after giving six months’ notice.
Within months after the NPPA passed an order slashing the prices of cardiac stents by as much as 85 per cent, multinational stent makers such as Abbott, Medtronic and Boston Scientific Corporation filed applications with the regulator to withdraw their new generation stents from the country saying the pricing regime made their products unviable. However, the Department of Pharmaceuticals (DoP) invoked the powers under Section 3 of Drug Price Control Order (DPCO) to restrict the companies from withdrawing their products. The Section 3 of DPCO allows the government in cases of emergency or non-commercial use to direct any manufacturer to ensure adequate availability of drugs or devices in public interest. It also enables the government to regulate the distribution of products.
The change in policy to allow firms to withdraw their stents emphasises the unrelenting stance taken by the government on the issue, say industry observers. “We support the decision of the NPPA to bring affordability to the masses. SMT is committed to bring latest generation products to India. We have introduced two new generation products in the last 12 months and have got a fantastic response. In case we have to discontinue, we will discontinue some older generation products,” CEO of Sahajanand Medical Technologies (SMT) and Convenor of Indian Stent Manufacturers Association (Isma) Ganesh Sabat said in a statement.
The commitment of Isma to introduce new generation stents is crucial. During deliberations with the authorities on stent price revision, multinational manufacturers and importers had said that they might not introduce latest stents in the country in the absence of differential pricing. The importers had also stressed that proving superiority of their drug eluting stents was a long process as it might take years to obtain adequate clinical data. But the apex body for drug price control refused to budge.
According to the NPPA, following the price cap on coronary stents, the market share of domestic stent makers has risen. Data suggests a 4 per cent shift in favour of domestic manufacturers who now have 61 per cent market share.
The domestic medical device market in India is expected to grow 15 per cent annually between 2014 and 2020 to $8.6 billion, according to a joint report by Deloitte and Healthcare Federation of India. But official figures reveal 59% fall in foreign direct investment (FDI) in the sector during the January-September 2017 period compared to the corresponding period of the previous year. Many industry representatives lay the blame for the fall in FDI on unnuanced market interventions and atmosphere of regulatory unpredictability.