The government has slashed the prices of knee implants by between 59% and 69% using a special provision in the drug pricing law that enables it to intervene in “extraordinary circumstances” in public interest. The move is expected to benefit over three crore arthritis patients in India needing knee replacement surgery.
Official sources said hip implants and intraocular lenses are the next items likely to attract the attention of the regulatory scanner.
TOI was the first to report, in its edition of August 5, 2017, that a price cap on orthopaedic knee implants was imminent following an analysis by the price regulator that showed manufacturers, distributors and hospitals were earning up to 450% trade margins on widely used devices.
The standard, widely used cobalt chromium in knee replacement surgery will now cost Rs 54,720 as against an earlier MRP of Rs 1,58,324. Similarly, the price of special metals like titanium and oxidised zirconium have been slashed by almost 70%, to Rs 76,600 from Rs 2.49 lakh. In case of revision knee replacement, which is usually done if the primary replacement fails, prices of implants have been cut by 59%.
The government said there was “unjustified, unreasonable and irrational” profiteering and trade margins on these devices, leading to exorbitant prices that push up patients’ out-of-pocket expenses. In fact, the high costs make treatment unaffordable for many who need arthroplasty procedures.
The regulator national pharmaceutical pricing authority finds that it is urgently necessary to act in public interest and has fixed and notified ceiling prices of orthopaedic knee implants for knee replacement systems, the order issued by the department of pharmaceuticals said.
“The government will not be a mute spectator to illegal and unethical profiteering,” chemicals and fertilisers minister Ananth Kumar said. He added the government would take stringent action against hospitals, importers and retailers if they charged in excess of the MRP fixed by the government.
According to government estimates, the price regulation of knee implants alone will lead to a saving of about Rs 1,500 crore annually for patients.
The new prices come into effect immediately and will also apply to all available stocks for sale in trade channels.
“The success of the order will depend on what steps are taken by the government to ensure that the overall procedure costs come down as a result of this price fixation,” Malini Aisola of the All-India Drug Action Network said.
“We hope this is just the tip of the iceberg and the government will go on to regulate prices of all other critical medical devices where similar market conditions prevail,” said Gurinder Grewal, former president of the Punjab Medical Council.
A price cap on implants is expected to benefit millions of patients with orthopaedic problems. Industry data, which experts say does not fully capture the picture, shows over three crore arthritic patients in India in need of knee replacement surgery. Since this is not a life-threatening disease, the number of patients opting for surgery is comparatively low.
Even then, estimates show that over 1,20,000 knee replacement procedures, and about 70,000 hip procedures, take place every year in India. And the costs are not low. Preliminary analysis by the NPPA shows the MRP of the total knee system ranges between Rs 59,091 and Rs 4,13,059. Add to this hospital costs, surgeon charges, time in the operation theatre, and several other miscellaneous charges. The latest price regulation by government is seen, in this context, as a step towards rationalising healthcare costs.