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Medical devices to be capped to ten percent price rise per year

The prices of medical devices will be capped to a 10 percent price increase per year reports the Times of India (ToI). This price increase cap will apply to all devices with the exception of cardiac stents, condoms and intrauterine devices.

Alongside the price cap it was announced that all medical devices classified as drugs under the Drugs and Cosmetics Act will have to place mandatory displays on their packaging stating the maximum retail price.Copyright: <a href=''>ersler / 123RF Stock Photo</a>

Cardiac stents, condoms and intrauterine devices are monitored more closely by the NPPA. Cardiac stents were recently added to the list of essential medicines. Any increases to the price of these devices must therefore be sent for approval to the NPPA directly. This will likely keep the price of these products at a constant level for a number of years.

Building upon the addition of cardiac stents to the essential medication list, fourteen more devices may soon be receiving price capping. The list ranges from orthopaedic implants, intraocular lenses and artificial heart valves to more mundane and commonly used devices such as syringes, needles and catheters. The implication of price-capping devices such as syringes (commonly used in many surgical procedures) is that price reductions could be made for many surgeries. As well as saving government-run hospitals money, this could potentially lessen the financial burden on Indians who turn to the private sector for treatment. Out-of-pocket (OOP) expenditure by Indian citizens accounts for almost 70 percent of healthcare spending in the country.

Of the devices to be regulated, orthopaedic implants see profit margins of between 500 and 1000 percent. This is comparable to the price markup seen for cardiac stents before the price capping, with hospitals often making huge profits off of both domestic products as well as imports.

The benefits of the price cap of devices are not universally agreed upon though. Some suggesting it may bring inferior quality goods to the Indian market. A well reasoned article in the Huffington Post India argues that capping the price of medical devices encourages the use of older generation products, or cheaply made alternatives. It may also discourage companies from the innovation of new devices since there is no profit to be made.

In the example of stents: “What needs to be understood is that we do not need access to any stent, but access to the best quality stent.”. This is a valid argument, in that in order to ensure the provision of stents is still financially viable for the hospitals, it is unlikely that the best quality stents will be provided. This in turn reduces the quality of care for patients.

Having a life-saving operation using a lesser quality stent may, though, be  better than the alternative of not having the operation at all because it is not affordable. A product’s higher quality will be of no use to those many people who cannot afford it.

When considering 30 percent of Indians live below the international poverty line of $1.90 USD a day, any reduction in the cost of medications and medical procedures is increasing the access to life-saving procedures of millions of people.

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