Fixing the price of stent is good, but fix the price of cardiac procedures too

On Monday, February 13, medicine price regulator - National Pharmaceutical Pricing Authority (NPPA) fixed the maximum price hospitals can charge for coronary stents that are implanted during angioplasty procedures on heart patients.

It fixed a ceiling price of Rs. 7,250 apiece for bare metal stents, and allowed a maximum retail price of Rs. 29,600 for drug eluting stents of all varieties. The move will be more of a shocker to the hospitals than the companies as it is common knowledge that sticker prices on the stents are multiple times higher than the price at which companies sell these products to the hospitals.

The prices permitted by NPPA covers the money that manufacturers and importers used to make from selling such stents to hospitals. What it does not cover is the huge trade margins that used to be enjoyed by the hospitals who promote such products.

The fact that NPPA move was triggered by the unethical practices going on in hospitals becomes evident as the notification specifically mentions that institutions such as hospitals, nursing homes or clinics performing cardiac procedures using coronary stents that are billed directly to the patients should comply with the order.

It also wants such institutions to specifically and separately mention the cost of the coronary stent along with its brand name, name of the manufacturer/importer/batch no. and other details, in their billing to the patients or their representatives.

The government intention needs to be applauded as there has been increasing complaints of patients being asked to undergo unnecessary cardiac procedures by hospitals due to the high margins that stents offer.

Whether the government will be able to effectively monitor the practices of the hospitals, though is another matter. Capping stent prices alone may not serve any purpose if the overall cost of the procedure gets jacked up as a consequence. The government needs to cap the cost of the overall procedure if it has to make ceiling price fixation on stents meaningful.