Margins in ortho implants as high as 449%: NPPA data

Signalling the end of inflated prices for knee implants, just like stents, the National Pharmaceutical Pricing Authority (NPPA) has revealed the unrealistic trade margins enjoyed by sellers of these medical devices.

According to the analysis done by the NPPA, which BusinessLine has seen, the average trade margins on some of the devices used in knee implants are as high as 449 per cent. The total trade margin on five implant components used in the knee range between 211 per cent and 449 per cent.

As a result, an insert, which has a landed price of ₹14,071 finally costs the patient ₹1.03 lakh — 449 per cent higher, a price sheet from the NPPA showed.

The Authority, which has had several meetings with industry stakeholders over the last few months, has given stakeholders a week to respond.

A similar exercise conducted by the Authority before bringing the prices of coronary stents under strict price control, which had shown that between the pharmaceutical company and the patient, trade margins of as much as 1026 per cent were added to the life-saving devices. As a result of which, a stent with a landed cost of about₹40,820 could finally burn a hole worth ₹1.98 lakh in the patient’s pocket.

The Authority had finally capped the prices of stents in February, decreasing the maximum retail price by 80 per cent for some devices.

A similar exercise is expected for several other medical devices, starting with orthopaedic (knee) implants. It is also expected that intraocular lenses and life-saving oesophageal stents will also be brought under price regulation.

In the case of knee implant components, the importers enjoy an average, healthy 29 per cent to 76 per cent margin, which is followed by 120 per cent to a full-figured 163 per cent margin for the distributor and hospital.

It is estimated that over two lakh replacement surgeries are conducted in India and the market is growing at an estimated 26-30 per cent annually.

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