Finding a middle path

201705ehm04The government’s commitment to rein in the cost of healthcare, has pitted various stakeholders of the sector against each other. For instance, soon after National Pharmaceutical Pricing Authority’s (NPPA) February 21 notification to fix ceiling prices on heart stents, medical device manufacturers/importers pointed out that procedure costs and specialist doctors’ fees were at the discretion of hospitals. Similarly, when Prime Minister Modi announced that there would soon be a legislation to mandate that doctors prescribe generic medicines, associations representing doctors across India, while supporting the move, deflected the attention to the weak drug monitoring infrastructure as well as the poor quality record of pharmaceutical companies. While the government has succeeded in shaking up these traditional alliances, will we see a new normal?

The NPPA seems in no mood to back down. In its latest memo dated April 28, it has threatened to prosecute medical device manufacturers/ importers under the relevant provisions of the Essential Commodities Act, if they do not submit weekly production and distribution schedules of heart stents. The memo points out that not a single company has complied with this part of its February 21 notification to date. This rap on the knuckles comes two days after it rejected the applications of two MNCs, Abbott and Medtronic India, who requested withdrawal of their high end stents from the India market, on the grounds that post the price caps, it was unviable to do so. A similar application of a third MNC, Boston Scientific, was still under review at the time of going to press.

According to a Grant Thornton report, India is the fourth largest medical devices market in Asia, (trailing Japan, Chain and South Korea). Estimated at $4.2 billion in 2014, India’s medical device  is expected to grow at a CAGR of 16 per cent during 2014 – 2018, according to a FICCI-QuintilesIMS paper, Medical Technology Sector in India – Enabling Swastha Bharat. Thus it is no wonder that the industry is trying hard to change the pricing watch dog’s stance.

Having realised that the government cannot and will not back down completely on the price cap issue, the effort now seems to be to win the ideological battle and find niches where smaller victories can be won. For instance, an April 28 statement from Medical Technology Association of India (MTaI) makes the case for ”categorisation so that quality and innovation are rewarded to keep that segment attractive and viable.’ Supporting this reasoning, AdvaMed, another device association, provides a classification system for DES, where a majority of stents are in Class 1 – DES, Class 2 – DES for complex cases and Class 3 – Innovative DES. The larger question is, what happens after the six month validity of NPPA’s February 21 order? Will there be an extension beyond August?

While May 1 is celebrated as Labour Day across the world, Maharashtra and Gujarat also mark their state formation on this day. But an analysis of Maharashtra’s status on public health in the May issue of Express Healthcare raises some red flags. In a comparison of 21 states, Maharashtra state topped a health index brought out last October. The study by the Indian Institute of Management-Ahmedabad placed Maharashtra as the best performer, followed closely by Tamil Nadu and Kerala, in terms of performance-based output which took into account the inputs available or created. The study spanned over five years of data from 2008 till 2012.

But is the success story in danger of unraveling? As the cover story analyses, Maharashtra’s public health spend has declined in the past three decades, from one per cent of GSDP in 1985-86 to just 0.49 per cent in 2017-18.  If this is the case, then the state’s vision of a disease-free, Arogya Maharashtra seems a tall task. (See story, ‘Arogya Maharashtra’ – Reality or mirage?, pages 12-16, May Express Healthcare). Of course, the next health index from IIM A might just have Maharashtra again topping or near the top of the health index, because it measures not just quantum of resources invested but efficiency of implementation. Watch out for analyses of more states in  forthcoming issues and as always, do keep the feedback coming in.

Viveka Roychowdhury