New Delhi: The drug pricing regulator is unlikely to enforce further cuts in the prices of knee implants for a year, said two people aware of the matter—a move that would bring relief to medical device makers who argue India’s price control mechanism hurts innovation, profits and future investment.

The National Pharmaceutical Pricing Authority (NPPA) is unlikely to order further price cuts and may extend last year’s prices for another year, according to two people aware of the matter.

NPPA reduced knee implant prices by as much as 69% last August. The reduced prices were to be effective for a year. With the deadline approaching, NPPA is now reviewing its decision.

In a notice to manufacturers on 20 July, NPPA asked for pricing details of knee implants to be provided by 30 July. “Companies manufacturing and importing primary and revision knee system are directed to furnish price data," it said. It asked for information like import price, price to the distributor, price to stockists, maximum retail price (MRP), and quantity sold for the period of April 2017 to March 2018. “NPPA had started its work on revisiting the ceiling price of primary knee implants and revision knee implants in July. The manufacturers have given their presentation and it is likely that the NPPA will maintain status quo," said the first person of the two people cited above, requesting anonymity. According to the August 2017 notification issued by the regulator, the prices of the most widely used complete knee implant (cobalt chromium) were cut to 54,720 before taxes, as against 1.58 lakh earlier.

Also capped were prices of a second surgery at 1.13 lakh as against 2.76 lakh earlier. The prices of special metals used in treatment, such as titanium and oxidized zirconium, were capped at 76,600 from 2.49 lakh earlier. The prices were applicable with immediate effect.

The move came six months after the NPPA brought cardiac stents under price control. Stents are wire-like meshes that are used to remove blocks, largely in the heart. The move on stents, which was preceded by several rounds of deliberations with companies, upset manufacturers who said the new prices would dissuade research and development. Many companies opted for a selective recall by withdrawing stents from the market. As a result, in its order on knee implants, NPPA said that all the manufacturers “will continue to ensure the availability of all the brands of implants" and “ensure that no disruption is caused in the supply chain because of printing new MRPs".

According to orthopaedic surgeons, 90% of the knee implants available in India are imported. Companies that sell knee implants India include Stryker, Smith & Nephew, Biomet, Zimmer and Johnson & Johnson.

Justifying its decision to cap knee implant prices, the NPPA order said there are as many as 20 million patients who require Arthroplasty—a surgical reconstruction or replacement of a joint—but that only about 100,000 can afford to have one every year.

Citing a World Health Organization report, the order said osteoarthritis is likely to become the world’s fourth leading cause of disability by the year 2020.

“It is noticed that orthopedic-knee implants are having unjustified, unreasonable and irrational high trade margins leading to their exorbitant prices, which affects the out-of-pocket expenses of patients and lakhs of patients are not able to pay for Arthroplasty procedures because of these exorbitant prices and are suffering in pain," the order said.

“Preventing such a scenario is essential in individual as well as national interest."

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