by R. K. Pandey
Dr R K Pandey, senior consultant, orthopedics and joint replacement, Venkateshwar Hospital, Dwarka dwells on the recent knee implant price cap by the government of India.
The recent announcement by the government to cap the prices of knee implants has largely been well received in the country, including by the medical fraternity which has unequivocally welcomed this step, as it will benefit a large number of people awaiting or wanting to undergo knee implant surgeries. Those who could already afford it will be benefitted further due to the reduced pricing.
The National Pharmaceutical Pricing Authority (NPPA) which is primarily the Government of India’s top agency for enforcing prices and availability of medicines has through this step extended its reach to medical devices. The NPPA has cited paragraph 19 from the Drug Price Control Order, which essentially gives the government the power to regulate pricing of medical devices in public interest. Interestingly, the initiative came a few months after a similar step that capped the prices of stents in India.
The benefits first
To begin with it is interesting to take note of some numbers first. The NPPA notification capped the most widely used cobalt chromium implants to approximately Rs 55,000/-, with a 65% average reduction of prices. Special metal implants (titanium and oxidized zirconium) have been capped to Rs 76,000/- and high-flexibility implants to Rs 56,490/-, both showing a 69% drop in cost, and revision implants witnessing a 59% drop in price being capped at approximately Rs 1,13,950/-.
Certain effects of these impacts are quite evident. This will make knee surgeries affordable for approximately 1.2 crores of orthopedic patients. Across India, over 1 lakh knee surgeries are performed each year. With around 98% success rate of knee surgeries, the number of total knee replacement surgeries has been increasing over the years and is set to increase further in the near future. This will also result in a growing focus on Indian manufactures of implants and hopefully will boost indigenous research and development in the field. Some reports suggest a saving of estimated Rs 15,000 crore for Indians. Also, these guidelines bring more transparency and clarity for citizens, and will assist decision making while choosing types of implants. It will also help the enforcement agencies and alert people to curb unethical practices.
Will quality suffer?
However, the additional step taken by NPPA of implementing the new directives with immediate effect seemingly has disturbed the market and supply chain and has caused some discomfort to the manufacturers. Understandably, the manufacturers and distributors have been affected by the slash in prices, and they would not have wanted the same for premium products.
Concern is that some manufactures will begin pulling their premium products out of the Indian market and will stop other orders in transit. In the present price bracket, most manufactures have provided 3 to 4 options and there will not be any room to launch any new product in India. The concern that foreign players will get disinterested in the Indian market and will lose incentive to introduce new technologies here is real. This might also have an adverse effect on medical tourism, as foreign patients or medical tourists who essentially visit India for such surgeries may not prefer cheaper alternatives. Notably, knee implants are a major part of the medical tourism business in India.
Distributors would also be watching the evolving trends closely as their profit margin will most likely decrease, and low profit margins might hurt their business interests in India. These factors can significantly impact the availability of quality implants for TKR patients and the economy at large.
Incentives for local Research and Development
Every change creates some ripples; how things will pan out will only be apparent in the time to come. At one end, the efforts of the Government to regulate the cost of implants so as to ensure that the best possible medical treatment reaches the last man should be applauded.
However, at the same time we also need the government to launch supportive measures to local manufactures so that they can bridge the quality gap, even if there is a flight of foreign suppliers. It is imperative that the government initiates measures that provide the necessary impetus to local research and development.
Local manufacturers must also be offered tax breaks
In the initial period so that they are able to devote their resources towards manufacturing global quality implants.
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