Hyderabad: Contrary to the popular view that stent prices are the main reason for the high cost of angioplasties, US-based healthcare consulting and information provider IMS Health in its latest study has found that while stent prices have fallen 30-50% in the last four years, the cost of angioplasties have more or less remained the same, indicating that the benefit was not passed on to patients by hospitals.
“Looking at price reductions (of stents) across levels, it seems like the benefits of decreased price are getting passed from manufacturers to distributors and from distributors to hospitals, but the benefits are not entirely getting passed from hospitals to patients," IMS Health said its report titled ‘Medical Devices in India—Accessibility, Quality and Pricing’.
The study was commissioned by the Advanced Medical Technology Association (AdvaMed), an international lobby group for the medical devices industry. According to the study, the prices of stents excluding hospital margin contributes a quarter of the overall cost of angioplasty.
Hospitals pocket the 13-15% margin on stents, while around two-thirds of the cost goes towards doctor fees, room rent, cost of medicines, diagnostics and other charges, the report said. “Medical device costs have either remained stable or declined by 6-10% year-on-year over the last 4 years, whereas drug and procedure prices have increased by 2-7%," IMS said.
The report said reimbursements of implants dropped 63%, while procedure costs grew 1% even in the Central Government Health Scheme (CGHS). “There was an attempt to reduce the procedure reimbursement limits but it did not work as hospitals denied procedure at reduced reimbursement limits," the report added.
A stent is a metal scaffold to hold the artery open to improve blood flow. The procedure of placing the stent in an artery is called angioplasty. The cost of angioplasty is around ₹ 200,000-250,000 on average in a private hospital, depending on the complexity of the case, number of stents and types used.
The reimbursement limit for angioplasty procedure is ₹ 93,000 under CGHS. A bare metal stent on average costs about ₹ 10,000-Rs 20,000, while a drug eluting stent (DES) ranges between ₹ 25,000- ₹ 80,000.
“The findings from the IMS study clearly demonstrate that reduction of stent prices have not benefited patients so far," said Abby Pratt, vice president of global strategy and analysis at AdvaMed.
“The singular focus on capping prices of stents will not help improve access to these life-saving devices," Pratt said. “What’s required is a comprehensive multi-stakeholder approach, that involves contributions from other stakeholders in the access," she added.
The government of India has in the past indicated its intention to cap the prices of stents to offer patients relief from high angioplasty costs. Analysts say hospitals are unable to pass on the cost benefit of reduced stent prices as the manpower and administrative costs have risen sharply.
“Given the scarcity of both clinical and administrative manpower in India, the salary hikes have been significantly more than other industries in last 3 years," said Rana Mehta, partner and leader, healthcare of PwC India.
“This is not commensurate with the price hikes hospitals have been able to do due to intense competition especially in the urban conglomerates," Mehta added.
“Prices of stents have been steadily coming down, and hospitals have passed on the benefit to the patients," said K. V. Krishna Kumar, a senior consultant cardiovascular-thoracic surgeon and academic head of the department of cardiothoracic surgery at KIMS Hospitals, Hyderabad.
Kumar said doctors’ fees are not the only reason, as other expenses have also shot up. “Excluding Delhi and Mumbai, the fees for cardiologists remained much the same in other cities, especially in Telangana and Andhra Pradesh," Kumar said.
Typically interventional cardiologists earn about ₹ 50-60 lakh per annum. The pay also depends on experience and number of cases handled, Kumar said.
According to the National Interventional Council (NIC), coronary interventions in India have more than doubled from 117,420 in 2010 to 248,152 in 2014, a result of the surge in cardiovascular diseases.
The total number of stents implanted in 2014 were 0.3 million of which about 60% of the market is shared by multinational companies such as Abbott, Medtronics, Meril Lifesciences and Boston Scientific.
India coronary stents market, valued at $481 million in 2015, is expected to reach $531 million in revenues by 2016-end.