The National Pharmaceutical Pricing Authority (NPPA), while fixing
the price cap on stents on February 13, also decided to request the
Union health ministry to monitor the quality of stents that are being
supplied under the Central Government Health Scheme (CGHS).
“The Authority also decided to request the Ministry of Health and
Family Welfare to be vigilant about the quality of coronary stents under
CGHS, in view of the fact that the manufacturers, hospitals and few
other stakeholders did accept that the quality of stents supplied under
CGHS rate contract was very ‘basic’,” the NPPA said in a detailed note
attached with the minutes of the February 13 meeting where the stent
price cap was decided.
The CGHS was started under the Union health ministry in 1954 with the
objective of providing cheaper and comprehensive medical care facilities
to central government employees, pensioners and their dependents
residing in 25 CGHS-covered cities.
“If the perception is wrong, the same should be dispelled by random
inspections and clinical trials and issue of necessary clarifications to
restore the faith of CGHS patients. This monitoring exercise needs to
be made regular and stringent, keeping public interest in mind,” the
NPPA added in its request.
A stent is a tiny expandable metal scaffold to open up narrowed or
blocked arteries. The ceiling price of bare metal stents (BMS) has been
fixed at Rs 7,260 per piece and that of drug-eluting stents (DES) and
biodegradable stents has been fixed at Rs 29,600 per piece.
While discussions were on with various stakeholders on how to decide
the price cap, stent importers and manufacturers “were opposed to taking
CGHS price or cost of production or even landed cost as benchmark,
since as per their arguments, those prices neither reflected the actual
market conditions, nor was such an option provided for, under DPCO,
2013”.
The NPPA noted: “They (stent importers and manufacturers) unanimously
mentioned that stents being provided to CGHS were among the lowest
category of DES and many patients had to pay out-of-pocket, if they went
for ‘higher quality’ stents. This practice, as per their view, had been
officially provisioned for by CGHS and was known practice by all
hospitals availing CGHS rate contract.”
On the other hand, civil society representatives held the view that
CGHS rates or the cost of production data could be taken as benchmark
for price fixation on which a reasonable margin to distributors and
hospitals could be provided for. However, the NPPA decided otherwise.
“The Authority also decided that the CGHS-based pricing method should
not be taken as a benchmark because CGHS prices are based on open
tenders and based on supply of bulk quantities where the manufacturers
normally quote at the bottom level. CGHS-based prices do not provide
scope for margins for future R&D, innovation and growth and may not
be good from the public health policy perspective in the long term.
Moreover, CGHS prices are meant for reimbursement and may not reflect
real price…” the NPPA stated.
The NPPA also decided that the option of Price to Hospitals (PTH)
should not be considered during price cap calculations, as hospitals are
not legal entities as retailers and the margins at the level of PTH are
too exorbitant to defeat the basic objective of price capping.
“Thus, for the final price calculations, the Authority considered the
options of Price to Distributor (PTD), the landed cost (LC) and the
cost of production (COP) data and excluded CGHS and PTH for the reasons
discussed earlier,” the NPPA noted.
Source : http://indianexpress.com/
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