Chanakya IAS Academy Blog

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Government caps prices of coronary stents

Chanakya IAS Academy

The National Pharmaceutical Pricing Authority (NPPA) had recently capped prices of coronary stents. A stent is a tiny expandable metal scaffold used to open narrowed or blocked arteries.

It was found during deliberations that exorbitant prices are charged for coronary stents, which is reflective of a failed market system driven by information asymmetry between the patient and doctor. This pushes the patient to financial misery.

The extreme regulatory measure was inevitable

  • To ensure accessibility, affordability and availability of healthcare for all
  • given the overall dominance of private health institutions in our country
  • asymmetry of information between the patient and the doctor
  • rising cost have led to impoverishment of families

A research paper published in Lancet makes a case for cost regulation:

  • Two third of the high out of pocket expenditure in India is on drugs
  • Medical technologies that include cardiac stents and knee implants are used irrationally

Impacts of this measure:

  • Make coronary stents accessible to people who really need them
  • Reduce the incentives available to unethical hospitals for their irrational use
  • An opportunity to expand the availability of stents in the public health system

Industry opposition to the move is based on:

  • The domain of medical devices is diverse and its inappropriate to apply the same price assessment for all categories
  • Price control can lead to delay in the introduction of new devices and quality concerns

What is NPPA and its role:

National Pharmaceutical Pricing authority was established as an independent body of experts as per the decision taken by the Cabinet committee, while reviewing Drug Policy. The Authority, has been entrusted with the task of fixing and revising prices of pharmaceutical products (bulk drugs and formulations), enforcing the provisions of the Drugs (Prices Control) Order and monitoring the prices of controlled and decontrolled drugs in the country.

The National Pharmaceutical Pricing Authority, the Drugs Controller of the State, and Drug Inspector in the district are the enforcing authorities at National, State and district Levels respectively.

Price control is a positive step, but more needs to be done:

  • Amending the Drugs and Cosmetics Rules to promote generic medicines
  • make it mandatory for doctors to prescribe only the generic name of the drug and not its brand name, to ensure affordable access for all sections of the society
  • A Planning Commission expert group on universal health coverage had recommended that raising spending on public procurement of medicines to 0.5% of GDP from the current 0.1% would help enhance coverage of essential medicines for all.
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