India regulator wants medical devices added to price control list, document shows

India regulator wants medical devices added to price control list, document shows

India’s drug-pricing regulator has asked the health ministry to add four more medical devices to a list of products eligible for price controls to reduce costs to patients, which if agreed could be another blow to the country’s $5 billion-a-year medical-technology industry.

The National Pharmaceutical Pricing Authority (NPPA) had said it did not plan further measures after prices of some heart stents were cut in February by 75 percent, part of a government push to make life-saving drugs and devices more affordable.

But a letter to the health ministry sent in March, which has not previously been made public, shows the regulator pushed to get four more devices on the “essential medicines” list that would allow the government to impose price caps if and when it was ready to do so.

After the February move, Medtronic PLC and Abbott Laboratories tried to withdraw some of their stents -wire mesh structures used to treat blocked arteries – but their request was rejected. Boston Scientific Corp sought to have the price cap raised, but a government panel turned down their plea.

According to the March letter seen by Reuters, NPPA Chairman Bhupendra Singh said the essential medicines list – comprised of more than 350 items, most of them drugs – should include balloons, cardiac catheters, and covered as well as peripheral stents, “as soon as possible”.

These devices are used in the treatment of heart ailments or to open blocked blood vessels elsewhere in the body.

Singh said that hospitals appeared to be compensating for the lower stent prices by charging more for other procedures and devices.

“It has been found that after the price control of cardiac stents several hospitals have increased the various ‘procedure charges’ in order to compensate for their losses,” Singh said in the letter, without elaborating on how the discovery was made.

“In some cases the cost of balloons and catheters have been charged at (a) much higher level than the cost of (the) stent itself,” he wrote.

Prime Minister Narendra Modi’s administration has pushed to make healthcare more affordable in India by trying to curb prices on drugs used to treat critical ailments such as cancer,HIV/AIDS and diabetes.

“I would request you to kindly consider on this issue and take necessary actions so that government’s intention of passingon the benefit to the poor is not frustrated by the hospitals/doctors,” Singh wrote in his letter.

A health ministry official who asked not to be named confirmed the regulator had made the request but played down its significance on the grounds the list of essential medicines was unlikely to be reviewed in the next 1-2 years.

Singh’s office did not respond to an email seeking comment.

After the stent price move, Boston Scientific asked the government for the price cap on its high-end Synergy stents,which was set at $450, to be raised to around $1,160, down from its earlier cost of around $3,000 but still well above the $750 it costs to import the device.

The medical industry has argued that price control measures hamper innovation and would affect future investment plans inIndia. Boston Scientific, for example, uses India as a research base to develop products for emerging markets.

The domestic medical device market in India is expected to grow by 15 percent annually between 2014 and 2020 to $8.6billion, according to a joint report by consultants Deloitte and Healthcare Federation of India, NATHEALTH.

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

Image result for catheters

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.

GST exemption withdrawn for hospital equipment

Image result for GST

The GST Council has decided to withdraw the exemption from countervailing duty (CVD), equal to excise duty, which is currently available to certain hospital equipment and 100% Export Oriented Units (EOUs), on import of all goods. This will make them liable to pay Integrated Goods and Services Tax (IGST) once the new regime kicks in from the scheduled date on July 1.

Import of equipment by government hospitals and those run by societies will be subject to full rate of IGST, as existing concessional rate of 6% CVD will not be available. This will impact hospital equipment and their parts and accessories, although basic customs duty exemption will be available, said tax lawyer R S Sharma.

While the GST Council has restricted the exemption from IGST to only specified category of importers, such as units in special economic zones (SEZs) and developers of these zones, the benefit has not been extended to EOUs.

“EOUs will henceforth will be liable to pay IGST on imports and can avail credit of IGST paid, which can be used by them for local supply of goods manufactured by them. They will also be entitled for a refund of IGST in case of excess accumulation of credit due to export,” said Sharma.

The EOUs are, however, still hopeful of getting the benefits that are currently available to them.

“Discussion on IGST for export promotion schemes is going on. EOUs are also an export promotion scheme. So we expect that it may also be exempted from IGST. If it is not the case then duty has to be paid and refund has to be sought after exports, which will lead to increase in the cost of working capital, thereby leading to an increase in the cost of product. This will make Indian products less competitive in the international markets,” said Rahul Gupta, chairman, Export Promotion Council for EOUs & SEZs.

Similarly, import of all consumer goods in packaged form with specified MRP, which are meant for trading, are at present exempt from 4% special additional duty, which is levied in lieu of VAT. It will now be subject to tax at full rate of IGST on imports.

GST to benefit common man: PM

Prime Minister Narendra Modi on Monday reviewed the status of GST, which is to be implemented from July 1, and said the new regime will benefit the common man.

During the two-hour meeting, Modi reviewed the IT and HR preparedness, query handling mechanism, and monitoring. “The Prime Minister was informed that GST systems such as IT infrastructure, training of officials, integration with banks, and enrolment of existing taxpayers will be in readiness well in time for the July 1 implementation date. Information security systems were discussed in detail,” an official statement said.

Modi also directed that maximum attention should be paid to cyber-security in IT systems concerned with GST.

Govt wants more medical devices under price cap

Govt wants more medical devices under price cap

After stents, the government wants to put more medical devices under price control and even proposes to change the Indian Medical Council Act to make it mandatory for doctors to prescribe generic medicines, health minister J P Nadda said on Wednesday.

Nadda said the ministry has started deliberations and is analysing data to bring more critical medical devices under the National List of Essential Medicines (NLEM). Once under NLEM, the devices will automatically come under the purview of price control.

“We are looking into it. A committee has already been formed which is evaluating price data,” the minister said. On generic prescription mandatory, he said the Medical Council of India (MCI) is doing the needful and if required, changes may be made to the Indian Medical Council Act.

Though MCI regulations direct doctors should prescribe generic drugs, changes in the law may give more legal teeth to the regulations.

TOI had reported earlier this month how, despite stringent price caps imposed on coronary stents, the nexus between medical device manufacturers and hospitals continues with the two colluding to push non-coronary stents and other high-end life-saving products with huge margins.

Documents with quotations from suppliers to hospitals reviewed by TOI show that medical devices and different kinds of stents — other than coronary, which have been brought under control — are offered to hospitals at prices far lower than that charged from the consumer. Though the National Pharmaceutical Pricing Authority (NPPA) has also asked for pricing data from all medical device manufacturers for all their products, it may be difficult for the authority to impose price caps on such products unless the health ministry brings them under NLEM.

As per the national pharmaceutical pricing policy, only medicines or pharmaceutical products under NLEM fall under Drugs Price Control Order and NPPA can cap prices.

It would be catastrophic to follow high-cost healthcare model of US: Sujatha Rao

Image result for it would be catastrophic to follow

Private hospitals have been in the news for all the wrong reasons lately. Sujatha Rao, former Union health secretary and author of the book, Do We Care? India’s Health System, tells Rema Nagarajan that the recent exposés underscore the need for greater investment in public healthcare delivery as well as better systems to regulate the private sector

You say in your book that the government has an ambivalent policy towards the overwhelming private sector. Why?
The recent exposes in the media regarding the overpricing of cardiac stents and establishing fake colleges by the private sector show what happens in the absence of regulations. Fraud on such a large scale cannot happen otherwise. As traced in my book, the evolution of public policy in health clearly shows how the private sector in India grew by default and the persistent failure of the political system to articulate a consistent and coherent policy to manage this elephant in the room. This is a serious omission since the health sector has severe market failures making government intervention an imperative, not a choice. Such indifference to develop an appropriate framework of laws, systems, protocols and the institutional architecture to regulate the sector is a failure of governance.

Does the government have any option but to purchase healthcare from the private sector?
As the private sector provides three quarters of outpatient treatment and two thirds of hospitalisation, options to ignore it are limited and the perception that government can provide all health services is impractical. The government still has room to bring in a balance in two ways. One, by creating the fiscal space to step up public investment with at least 1% of GDP only for building the health infrastructure, particularly in areas where government is the sole provider. Two, by keeping its dominance in primary and secondary care markets that address over 95% of medical ailments, prevent disease, promote wellness, and in the long run, reduce costs for government and households. Every country tries to keep control over healthcare expenses, either by controlling primary care so that the push to more expensive hospitalisation is regulated, or by regulating secondary and tertiary care with protocols and price caps so that there are no runaway surgeries and unnecessary care. If the whole chain is privatised and unregulated as it is now, then it can become unaffordable. In any case, government’s first charge is to ensure universal access to public goods like basic healthcare, clean air, water, environmental hygiene and nutrition. In my opinion, this is an obligation the state cannot abdicate. This alone will reduce a substantial burden of disease and out-of-pocket expenditure.

You say public policymaking is trending towards greater reliance on consultants than building institutional capacity. Why?
If you take a historical view, you will see a transition from reliance on classical public health experts to commercial consulting companies like Ernst Young or McKinsey, in helping draft public policy. This is not a stable solution. What is needed, and government does not do adequately enough, is investing in institutionalised research and promoting knowledge to anchor policy on evidence. Our success in reducing the incidence of communicable diseases like malaria, guinea worm, polio or HIV/AIDS is largely on account of good quality evidence that helped guide policy and implementation strategy. Health falls in the realm of behavioural economics and regulating that requires policies to be rooted in our own cultural and behavioural preferences, social realities and political and administrative contexts. Besides, such accounting firms also have conflicts of interest as many are also consultants to private companies in the health sector and carry a bias against government intervention and public health.

Budget 2017 does give a lot more to public healthcare delivery, doesn’t it?
It’s not the 28% increase that should concern us but the quality of spending proposed. More worrying is the absence of a clear vision. In this context I am glad to see the recently released National Health Policy embedding a vision. One may disagree with it and there may be some contradictions, yet at least there is a vision that will now enable bringing in required regulations to mitigate any harm. The challenge today, rather than spelling out schemes, is articulating a vision for the next decade and an implementation plan that has a national consensus to ensure it is placed above partisan politics. Public health goals have been stated but realising them would need huge investments in terms of trained people, and appropriate infrastructure, particularly at the level of primary care. Primary care is not just about polio drops and institutional delivery. It’s about averting diseases that are expensive to treat. For example, there would be no need for too many dialysis centres if we can control hypertension and diabetes. Neglecting primary care means opting for the high-cost, specialist-led and hospital-based US system of care. The US is already paying a heavy price because of their model; in India, it could be catastrophic.

Private hospitals reuse disposables, make you pay for them

Disposables like catheters, guide wires and balloons used in every angioplasty are reused and billed repeatedly in many private hospitals.

Adding to the risk of infection, you could be paying for something that has already been paid for. And the hospital may be making a profit of Rs 20,000 to Rs 30,000 on every procedure with simple reuse and rebilling, say industry sources.

The practice is so rampant that the health ministry has issued an office memorandum warning against reuse of disposable surgical items, particularly in cardiology, when they are meant for one-time use.

“The items after one procedure are sterilised and reused and (patients) are charged full amount of these items,” stated the memo dated December 21, 2016. The matter had been “viewed by this ministry seriously”, it said, and clarified that “reuse of disposable items, particularly in cardiology and other specialties, is not permitted in healthcare organisations empanelled under CGHS (Central Government Health Scheme)”.

It goes on to warn of “suitable action including withdrawal of CGHS empanelment” against defaulters. It is silent on action against big corporate hospitals that are not empanelled under CGHS.

“Most private hospitals, especially hospitals chains, insist that cardiologists reuse these items. While reusing these items a couple of times might be justified in some cases where you want to help bring down costs for a patient, in most of these hospitals, not only do they reuse four or five times, patients are also billed afresh for each of these items, helping the hospitals make a profit of Rs 20,000 to Rs 30,000 on each procedure or patient,” explained a cardiologist who has worked in several leading private hospitals.

All disposable items have clear instructions on the packaging saying they should be used only once and cannot be resterilised. Some cardiologists in private hospitals admitted that reuse was common but said it was not a problem if the items were properly resterilised. Companies, they said, insisted on single use to sell more of their products.

Cath lab technicians and dealers who sell disposables and stents to hospitals also confirmed that such reuse was common. Hospitals like AIIMS and PGI hardly ever reuse these items as there is no pressure to cut corners to make profit.

“In the US, solid catheters or catheters without holes can be resterilised and reused but only once or twice. But reuse of catheter with holes like a guide catheter used in angioplasty is not allowed as it is difficult to clean the insides where blood residue might remain. This is to prevent any chance of HIV and Hepatitis B infection. Also, resterilising affects the quality of the item as it hardens the plastic, making it less flexible,” explained a senior AIIMS cardiologist.

Chain hospitals are the worst offenders, according to a cardiologist who has worked in one such institution. “If doctors in one hospital in the chain reuse an item five or six times, that is lauded as a great example of cost saving. It is pushed as standard operating procedure across the entire chain, putting enormous pressure on doctors who try to resist such unethical overuse of a disposable item,” explained the cardiologist.

“Reuse is bad and doing so without the patient’s consent is criminal,” said another cardiologist. “And charging for resued items is fraud of the highest order being done in most elite hospitals to push up profits. It is easy to investigate and expose this. The government can get the number of angioplasties done in a hospital and ask for proof of purchase of the disposables for the last two years. There is a formula for how many disposables are needed for each angioplasty. They will find that far fewer disposables have been purchased than the required number, which will show clear reuse. Such hospitals should be prosecuted,” he said.

However, reusing of items with patients’ consent to reduce costs for the poor should not be treated as criminal acts, he added.

Doctors debate stent ethics after price cap

The National Pharmaceutical Pricing Authority (NPPA) decision to put a cap on stent prices has not only dealt a huge blow to hospitals and device manufacturing companies but has also thrown up a question of ethics, with experts locking horns on the appropriateness of stent implants.

Whether one needs a stent implant or not is generally decided by a lone cardiologist. The norm in some developed countries, however, is for a ‘heart team’ to take a collective decision. The team usually comprises a cardiologist, a cardio thoracic surgeon, a cardiac anesthesiologist, general physician and an outsider.

What’s worse in the country is that there is neither a third party watchdog to regulate stent implantation according to established protocol nor is a medical audit done.

“Without a third party watchdog, a medical audit or a heart team to take a collective decision before stent implantation in a patient, as is done in a few developed countries, it will always leave a doubt that stents are being overused,” said Dr RV Kumar, cardiothoracic surgeon and head of department of cardiothoracic surgery at Nizam’s Institute of Medical Sciences (Nims).

In fact, a medical audit of stents is performed on Aarogyasri patients, but not in the case of private patients. In such cases, even private insurance players do not look into the merits of each angioplasty but merely give procedural clearance to the hospitals.

Dr MSS Mukharjee, director, department of cardiology, Maxcure Hospital, Madhapur, said that the concept of stent appropriateness will develop in due course of time.

“Don’t mix stent appropriateness with the stent price capping issue. Now, the problem is stent pricing and how people who can afford to buy the latest fourth generation stents are helpless as device makers have withdrawn them from the market,” he said.

He added that cardiologists in India generally follow the protocol and guidelines issued by the Cardiology Society of India and American College of Cardiology while deciding to implant a stent in a patient.

Meanwhile, patients looking for high-end stents continue to suffer as city-based corporate hospitals find themselves in a spot after price cap. “There is a lot of confusion since patients want high-end stents and companies have started withdrawing stocks from the market,” said Harish Manian, COO of Continental Hospital.