Alvarez & Marsal sees that price control of cardiac stents has a direct impact on top-line growth of multinational companies in terms of margins because of a compression across the value chain. The companies are expected to face an erosion in earnings in terms of gross sales.

However, this could result in a windfall for Indian manufacturers who offer devices at a significant discount to their foreign manufacturers. The significant drop in prices could also lead to an inflection point in demand for indigenously manufactured stents, Kaustav Ganguli, senior director, Alvarez & Marsal, told Pharmabiz.

Centralized pricing control of medical devices has the right intent from the patients’ perspective but for it to have the desired impact of truly impacting patient pay-out, pricing control needs to take a holistic view of packages charged by hospitals instead of only taking a singular view of device prices, he added.

Medical device regulations in India and recent changes in such norms focus on its classification, manufacture, import, distribution, registration and clinical trials on the one hand. On the other it is related to pricing control.

With regard to the non-pricing regulations, the CDSCO and the ministry of health are the two entities that oversee medical devices. Under the ambit of the Drugs and Cosmetic Act (D&C), approval of new drugs and hence devices, quality control and supervising state authorities are central responsibilities whereas state authorities oversee manufacturing, import and distribution.

 “While there is now a clear intent towards recognizing medical devices as a separate category distinct from drugs, approval and regulatory compliance for medical devices continues to be a cumbersome process for most categories of devices,” noted Ganguli.

The next regulatory aspect relates to central pricing control of medical devices. The first big step in this direction has been made by pricing control of heart stents. Over the next few years, the government would be expected to expand pricing control to a broader category of medical devices that have a direct impact on patient pay-outs. For such broad-based pricing control, the key enabler would be classification and inclusion of the relevant category of medical devices which, in turn, has to be driven by the CDSCO in the absence of a central regulatory body on medical devices., he said.