At the Press Briefing organized by the Medical Technology Association of India (MTaI) in New Delhi today, the association reiterated that pricing regulations are a regular phenomenon in the drugs industry, but the same rules should not be generalized for orthopedic implants. Orthopedic Implants are different from drugs and other medical devices where prescription and end-point availability are the only critical factors for treatment.
Medical devices make up a relatively small percentage of overall costs. Yet, they can have a large impact on the outcome. The connotation to knee replacement surgery is quite diverse, starting from a Patello-femoral Joint Replacement to Partial Knee Replacement to Total Knee Replacement to Revision Surgery to Tumor Prosthesis. In addition, costs vary per surgery and the type of implant used.
However, the cost of the implant is only one component and multiple other factors are equally important to ensure a successful surgery:
- Company / dealer needs to maintain availability of all implant types at each location, and channel inventory can run into minimum 300 Days (as against any other industry avg of 45-60 days).
- Each implant can only be used with a specific instrument set, which are provided on consignment basis by dealers / manufacturers during all surgeries. Cost of importing, maintaining and transporting these instruments runs into tens of lacs for each set.
- Given the specialized instrumentation systems, orthopedic companies mostly provide support in the OT through dedicated manpower. Costs of manpower and surgery support, running into “000 of Rs. per surgery, is completely borne by the channel.
- Medical device companies operate with a strict ‘no train no use’ policy for such implant systems. Training on each implant technique, is provided by medical device manufacturers, to ensure right surgical techniques.
In view of the complex nature of delivery structure and role of value chain, it would be prudent to form an industry working group to work with the NPPA on building a pricing structure governance model. This will be in true spirit to ensure long term patient access and safety. Applying existing drugs trade margin rules to this industry might lead to disruption of entire ecosystem and poorer patient outcomes in long run.
We need to balance affordable health care today with the importance of incentivizing investment in innovation that can transform health tomorrow. It builds on a long history of caring for patients and a commitment to developing innovative medical technologies that transform the lives of patients with serious diseases.
MTaI is already engaged with the government and will put before it our proposal to improve patient access very soon. – Medical Buyer Bureau