Maha FDA probe finds imported catheters sold at 500% mark-up

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Barely a month after the Maharashtra Food and Drug Administration (FDA) exposed hospitals for recycling guidewire catheters and balloon catheters meant for single use during angioplasty, it has unearthed massive profiteering—in some cases, to the extent of 500% of the import price—in the sale of these medical devices.

“Our over-two-month investigation spanning 12 hospitals across Maharashtra, as well as visits to distributors and manufacturers in Delhi and Chennai, reveal that patients end up paying 70% to 84% more than the landing cost of, say, a balloon catheter,” said outgoing FDA commissioner Dr Harshdeep Kamble. For instance, the probe revealed that an imported balloon catheter sold to a patient at Rs 22,000 earns a profit of Rs 12,505 (more than 50% of the cost) for a hospital and a distributor.

The report was sent to the National Pharmaceutical Pricing Authority (NPPA) on Wednesday.

The investigations found that though the hospital-distributor-importer nexus raked in huge profits, most hospitals still managed to sell catheters to patients at rates lower than maximum retail price, proving once again the exorbitant retail mark-up.

The catheters checked for FDA’s investigation were mostly imported; importers marked up the price and sold to distributors who then added their own margin and sold to hospitals, which, in turn, sold to patients (see graphic).

“MRP of a balloon catheter was found in the range of 413% to 599% and in one case, it was found to be 1080% of the landed cost to the importer,” said FDA’s intelligence branch head Madhuri Pawar.

Like with stents, the findings reveal that hospitals are the biggest profit-making centres in the supply chain. “The profit earned by the hospital ranges from Rs 1,110 to Rs 15,760 for a balloon catheter. In the case of a guiding catheter, it was between Rs 428 and Rs 4,100,” said Pawar.

A press release sent by the FDA’s intelligence branch, which started the inquiry almost two months back, said the number of angioplasties performed in India is increasing every year. “In 2015, 3.75 lakh angioplasty procedures were performed and 4.75 lakh stents were used in the country,” the release said, adding that one or two catheters are used per procedure. Apart from a stent, angioplasty also involves use of other drug-notified devices such as balloon catheters, guiding catheters, guide wires.

The FDA note said that the NPPA should bring control over prices of balloon catheters and guiding catheters by declaring a fixed profit margin for the manufacturer and importer as well as distributors and hospitals.

“The catheters are already included in the drug category. They should now be included in the National List of Essential Medicines so that there can be a cap on their prices,” added Dr Kamble.

Incidentally, Maharashtra FDA had done a similar investigation on overcharging for stents, which paved the way for NPPA to cap their prices in February this year.”The NPPA capped prices of stents in February to around Rs 30,000 to check profiteering in the supply chain. NPPA should now do something similar for catheters as well,” said Dr Kamble.

The hospitals where FDA carried out the investigations include Fortis Hospital in Mulund, Hiranandani Hospital in Vashi, Jupiter Hospital in Thane, Kamal Nayan Bajaj Hospital in Aurangabad, Sahyadri Hospital in Pune, Wockhardt Hospital in Nagpur, Platinum Hospital in Mulund, BSES Hospital in Andheri, Dr L H Hiranandani Hospital in Powai, Jaslok Hospital on Peddar Road, Asian Heart Institute in Bandra and Bombay Hospital in New Marine Lines.