About a dozen chief executives on the panel and all of them were jittery. They weighed their words carefully and in a measured, patient tone answered a volley of questions to balance the popular opinion. They were neither evil nor irrational. On 1 June, the Medical Technology Association of India (Mtai), representing multinational companies like Bausch + Lomb, Boston Scientific, Johnson & Johnson, and others, had met at Le Meridian hotel in Delhi to present their side of the story, three months after stent prices were capped in India.
It was all for naught. On 16 August, the drug regulator expanded its control of the medical device industry and capped prices for orthopedic knee implants, too.
Stents then, knee implants now.
The fear of the advancing price cap tsunami has gripped the medical device manufacturers. But who should be worried more? The multinational manufacturers, who have a global market of $3.7 billion, out of which India accounts for just over 1.3%; or the patients in India, who need medical devices, 75% of which are imported. The scale of worry should tip towards the Indian patient. It isn’t evident right now. But soon, it will be.
Two multinationals, Abbott and Medtronic, asked the regulator in April to let them withdraw their ‘next generation’ stents from the Indian market, as these had become commercially unviable at capped prices. Abbott’s dissolvable stents, Absorb and Xience Alpine, were priced at Rs 1.9 lakh and Rs 1.5 lakh respectively before the National Pharmaceutical Pricing Authority (NPPA) put a ceiling of Rs 29,600. Abbott, Medtronic and Boston Scientific, all of whom are headquartered in the US, have nearly 70% of the Indian market share. Even local manufacturers, who constitute the remaining 30% have something to lose—their incentive to innovate. Mumbai-based Meril Lifesciences which received the drug controller’s approval for a new kind of stent after a fortnight of price capping is unable to sell its new product in the Indian market at capped prices. The company has not put a price on its innovation yet because India is no longer a market for it.
“We have been selling here [in a small market as India] in the hope that the market will grow and the scale will lead to better efficiencies and quality but do we have a reason to stay now?” asked the managing director of one of the four multinational companies—Stryker, Johnson & Johnson, Smith and Nephew and Zimmer—that cover about 80% of the knee replacement implant market in India.