Device makers change tactics to fight India’s price cap

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When India began imposing price cuts of between 75% and 85% on heart stents in February 2017, many industry watchers expected global medical device makers to pull out of the market altogether. market.

The logic was simple. Since US device manufacturers such as Boston Scientific and Medtronic primarily supplied the niche segments of the Indian stent market, selling these value-added products at lower prices simply did not make business sense.

Price caps ignore differences in quality and value-added production, and in some cases device manufacturers must sell their product at a loss.

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Some experts even worried about the future supply of critical devices for patients in the second most populous country, as price controls on stents were seen as a precursor to lower prices for other devices ranging from catheters to implants. orthopedics.

Fast forward to 2022, and it all seems like much ado about nothing.

Device makers seem to have made peace with the fact that India is too vital a market to avoid, with some even finding ways to satisfy price regulators.

“We cannot ignore India as a market. But we have to assess how to keep commercial interests in mind. We’re not thinking of launching brand new stents in India because it’s not viable. But once this product has been in the market for a few years and new products are launched, we will look to bring it to India,” a Boston Scientific official said on condition of anonymity, citing lack of clearance. to talk to the press.

Some medical device manufacturers have gone further and even decided to invest more in innovation here with the aim of making India a major hub for research and development.

For example, Boston Scientific brought back Synergy, a stent that was retired after price caps were introduced, and recently inaugurated its second R&D facility in India, years after its first facility in Gurugram became operational.

“This second R&D center reinforces our commitment to make a significant contribution to India’s medical device innovation landscape,” Boston Scientific India Managing Director Manoj Madhavan said at the facility’s grand opening. in Pune.

India’s medical device market was worth Rs. 75,611 crore ($10.36 billion) in 2020, according to the India Brand Equity Foundation, a government export promotion agency.

Medtronic did not respond to questions from DH, and Boston Scientific declined to comment on its strategy for India.

“India has so many talented people capable of research and development. Also, there is not a lot of capex involved in R&D. For example, we don’t need a manufacturing facility,” a senior Boston Scientific official told DH on condition of anonymity.

Boston Scientific has commercialized five India-designed catheters and also secured patents for a number of products in recent years, the senior Boston Scientific official told DH.

Meanwhile, Medtronic opened its largest R&D center outside the United States in Hyderabad last year. DH could not know the status of its stents in India.

Abbott, Boston Scientific and Medtronic had asked for a better price for their latest stents claiming superiority. However, studies, including those from TCTMD – a provider of in-depth coverage of cardiovascular disease research and practice – had noted that evidence of non-inferiority did not mean these stents were superior in efficacy.

A 2021 study by TCTMD said there was no real benefit, even with stents like Synergy. The report states, “There was no additional risk of acute stent thrombosis with Synergy, but also no real benefit over leading DES. A DES or drug eluting stent is a wire mesh coil that helps reopen a blocked coronary artery and keeps it open.

A senior Medtronic official told DH that one of the problems in India is scalability, adding that the market represents no more than 2% of the total revenue of multinational device companies selling their products here. .

“Ideally it should have more than 10% for the population,” this person told DH on condition of anonymity.

Some pundits sided with business and said price controls aimed at supporting India’s domestic industry made little sense.

“Companies don’t plan for a year or two. They plan a lot ahead. For a strong investment climate, it is important to provide a predictable and enabling environment (such as regulatory and pricing issues) For the innovative medical device industry, the government should consider encouraging R&D in India rather than (focusing) disproportionately on ‘Made in India’ and local content,” said Krishna Sarma, Founder and Managing Partner of the Delhi-based Corporate Law Group.

“The latter can be required over a period of time without hampering access to new cutting-edge medical devices for Indian patients,” Sarma added.

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