National Pharmaceutical Pricing Authority’s (NPPA) focus on orthopaedic knee implants has made the industry jittery. The multinational corporation like Johnson and Johnson, Zimmer Biomet, Smith and Nephew, Vygon that manufacture these implants are willing to work towards self-regulating prices instead of letting the government do it. Last time, the National Pharmaceutical Pricing Authority (NPPA) stepped in was to bring down prices of cardiac stents. The way in which the NPPA priced stents shook the entire industry.
The Medical Technology Association of India (MTAI) met has proposed to form a proposal for making medical devices more affordable. Sushobhan Dasgupta, managing director, Johnson and Johnson India said," Price the same implants are sold in the European market thrice the MRP at which they are sold in India." These makers of knee implants have told the NPPA that they will submit a proposal for self-regulation.
After capping the prices of cardiac stents and proving that huge margins at various levels of the supply chains are why the prices of stents were sky high, the NPPA has started monitoring the prices of other medical devices as well.
A recent report is on the margins in the supply chain for various orthopaedic knee implants said that the average margin on a full set of orthopaedic implants seems to be 313%. The total trade margin is essentially the maximum retail price (MRP) minus the import price. In this, distributor and hospital get a margin of 335%; the company importing these implants earns a margin of 76%.
NPPA put orthopaedic implants into four categories — femoral, tibial plate, insert and patella. The total margin in the case of femoral implants is 287%. That to distributor and hospital is 120%; the importer gets 76%.
The margins for tibial plate and patella are on the same lines. For the former, the importer gets 67%, while distributor and hospital get 137%. The tibial plants can cost a patient anywhere between Rs 20,000 and Rs 122,336. The distributor buys at prices between Rs 7,538 and Rs 46,555. These are imported at a price anywhere between Rs 8,352 and Rs 17,492.
Patella implants can cost a patient anywhere between Rs 4,000 and Rs 17,900. The price to the distributor is between Rs 675 and Rs 5,807, while the landed price is between Rs 1,178 and Rs 4,748. Almost the same types of margins are maintained in the case of femoral implants.
The margins for inserted implants are higher than in any other category. The total trade margin is 449% and for distributor and hospital, it is 163%. The minimum retail price is Rs 9,091, while the MRP is Rs 1,03,700. The landed price is Rs 3,263 and Rs 14,071.
Apart from orthopaedic implants, state Food and Drug Administration (FDA) have done studies on other devices. These show hospitals sell oxygen bags at 300% more than what they procure at. The urinary bags are sold 500% higher.
The trend is the same for intraocular lenses. The difference between the price to the hospital and the MRP is between 200% and 300%. In India, there are 1,20,000 knee implant procedures conducted every year.