Global med-tech firms, India locked in tussle after stent price sting

Abbott India

28/04/2017 13:51

* Global med-tech firms nervous about India price controls 
    * Companies plan to step up lobbying efforts, sources say 
    * Execs say price caps put investments at risk, curbs 
innovation 
    * India says ensuring affordability for patients more 
important 
 
    By Aditya Kalra and Zeba Siddiqui 
    NEW DELHI/MUMBAI, April 28 (Reuters) - A group of global 
medical-technology companies plans to tell Indian officials next 
month that any further price control measures would risk future 
investments and make them less likely to introduce new products 
in the country, according to an industry source familiar with 
the matter. 
    The lobbying effort by Abbott Laboratories  ABT.N , Boston 
Scientific  BSX.N , Johnson & Johnson  JNJ.N  and others comes 
after the government of Prime Minister Narendra Modi in February 
set a price cap for stents - small wire-mesh structures used to 
treat blocked arteries - slashing prices that patients pay for 
some devices by about 75 percent.   
    That has sparked a growing showdown between the companies 
and Modi's government in India, where the "med-tech" sector is 
worth $5 billion. Abbott and Medtronic  MDT.N  filed for 
withdrawal of some of their stents from India, but the 
government on Wednesday rejected their request, saying it 
contravened the nation's drug laws. 
    Modi has in recent years taken a more aggressive stance 
against multinational healthcare companies, announcing price 
curbs on drugs used to treat critical ailments such as cancer, 
HIV/AIDS and diabetes. 
    At a public event this month, the prime minister said 
patient interests were more important than "unhappy" companies.  
    The firms, meanwhile, worry price controls could extend to 
other devices such as implants or valves, making it economically 
unviable for them to sell next-generation products in India, 
industry sources said.  
    Executives from Abbott, Medtronic and Boston Scientific - 
which all sell coronary stents in India - along with Johnson & 
Johnson and others, plan to approach India's health and trade 
ministries in May to convey that "price control is not the way 
forward", according to an India executive at a multinational 
med-tech company aware of the plans. 
    "There is a lot of nervousness," the executive said.  
    Johnson & Johnson, for example, is worried about potential 
price curbs on its imported knee, joint or hip implants, another 
industry source said, adding the company was working with trade 
groups to write letters to the government. 
    Boston Scientific said it was engaging with the government 
and would abide by regulations. 
    Medtronic said it intended to again file a plea for 
withdrawing one of its stents. Abbott said it was speaking with 
the government to file for withdrawing two stents and would look 
at reintroducing them if they became "commercially viable". 
    Johnson & Johnson declined to comment.  
    Another industry source aware of companies' strategies said 
the withdrawal pleas were aimed at sending a "strong signal" to 
the government by disrupting access.     
    None of the companies commented on planned government 
meetings or broader industry worries. 
    National Pharmaceutical Pricing Authority (NPPA) Chairman 
Bhupendra Singh on Thursday sought to calm industry concerns, 
saying the authority was in the process of collecting price 
information for 23 devices but "as of now there is no proposal 
to cap the prices".  
    Singh, whose agency is the government's drug pricing 
regulator, declined to comment on industry jitters or lobbying 
efforts.     
 
    COSTS VS ACCESS 
    The domestic medical device market in India is expected to 
grow by 15 percent annually between 2014 and 2020 to $8.6 
billion, according to a joint report by consultants Deloitte and 
 Healthcare Federation of India, NATHEALTH. 
    Rana Mehta, leader of healthcare at consultants PwC India,  
said many firms had started re-evaluating their India strategy. 
    "This uncertainty might be detrimental to the growth of the 
industry," said Mehta, who advises several multinational 
med-tech companies.        
    Abbott and the Medical Technology Association of India, 
which counts Boston Scientific among its members, have in the 
past fallen short with their lobbying efforts in New Delhi, 
according to documents seen by Reuters. 
    In letters written to the government departments of health 
and pharmaceuticals during August and September, they appealed 
to Indian officials to have a more liberal approach on stent 
pricing and not treat all stent devices as the same, submitting 
dozens of pages of research papers and clinical studies in 
support.  
    Abbott wrote this would "encourage" medical device 
innovation. 
    But the pricing regulator NPPA ruled against their requests. 
    In February, it termed stents as "essential" devices, noting 
cases of heart disease were rising and the stent pricing was 
"restrictive and exorbitant". It did not differentiate among 
types of drug-releasing stents as the industry desired. 
    The price cap was set at 7,260 rupees ($113) for the older 
generation metal variants and 29,600 rupees ($461) for 
drug-releasing variants.  
    Abbott said it was "disappointed" with the decision. An 
executive at the Medical Technology Association said different 
types of drug-releasing stents should be treated differently.  
    Activists have lauded the government's action on stent 
pricing, saying reduced prices would benefit the masses.  
    "The government intervention is expected to end exploitation 
of patients," health activist K.M.Gopakumar said. 
    But some in the healthcare industry disagree.  
    "Considering affordability is important but not at the cost 
of putting brakes on the evolving technology that is so 
essential to ensure patients' well-being," said Shirish 
Hiremath, president of the Cardiologist Society of India. 
 
 (Editing by Tom Lasseter and Alex Richardson) 
 ((aditya.kalra@thomsonreuters.com; +91-011-49548021; Reuters 
Messaging: aditya.kalra.thomsonreuters.com@reuters.net)(Twitter: 
@adityakalra)) 
 
Keywords: INDIA MEDTECH/