New Delhi, Aug. 16: The Centre today announced a range of price caps on knee implants that will allow patients to save tens of thousands of rupees on each procedure, calling it a move to "prevent unethical profiteering".
The National Pharmaceutical Pricing Authority (NPPA), the government's price regulator, has set ceiling prices ranging from about Rs 54,000 to Rs 1.13 lakh for implants that earlier carried average maximum retail prices (MRPs) of Rs 1.58 lakh to Rs 2.76 lakh.
The move follows the release of industry and market data earlier this month by the NPPA indicating that distributors and hospitals were making tens of thousands to lakhs of rupees in profits for every implant sold.
Union chemicals and fertilisers minister Ananth Kumar, who announced the caps, said the NPPA data had suggested "there was huge margin in trade which was found to be unreasonable and in a way unethical profiteering".
Prime Minister Narendra Modi had in his Independence Day speech yesterday indicated that his government would soon cap the ceiling prices of orthopaedic knee implants. "Walking the talk of the Prime Minister...the government has fixed the ceiling prices of orthopaedic implants used in knee surgeries," Kumar said.
The most widely used cobalt chromium knee implant will have a ceiling price of Rs 54,720 compared to its average MRP earlier of around Rs 1.58 lakh. A specialised titanium and oxidised zirconium implant will cost Rs 76,600 compared to the earlier average MRP of around Rs 2.49 lakh. A revision implant will carry a ceiling price of around Rs 1.13 lakh compared to its earlier average MRP of around Rs 2.76 lakh.
The ceiling prices translate into reductions ranging from 59 per cent to 69 per cent for patients.
The NPPA said it had taken into account all available information and viewpoints to fix the prices under the "present extraordinary circumstances of a failed and exploitative market because of information asymmetry between the patient and the healthcare delivery system".
The market figures released earlier this month by the NPPA - an agency under the chemicals and fertilisers ministry - show that the trade margins shared by distributors and hospitals for knee implants ranged from Rs 35,000 to Rs 3 lakh.
The government estimates that India has between 12 million to 15 million orthopaedic patients who require implant surgery but most people diagnosed with the need are unable to afford the procedure. "The government is reforming this state of affairs," Kumar said.
The Medical Technology Association of India, a body representing device-makers which had expressed concern last week about the NPPA's expected price control move, today remained silent. Its officials said they were examining the NPPA order.
The move to control prices of knee implants follows caps on coronary stents imposed earlier this year amid concerns that medical device makers are setting MRPs that allow distributors and hospitals unreasonable profits. The moves to control device prices come against the backdrop of evidence that hospitals are also making money on drug prices.