Despite India having among the lowest medicine prices in the world, over the years, the National Pharmaceuticals Pricing Authority (NPPA) has only increased its coverage of the sector and imposed various types of price-caps. If this wasn’t enough, the cap was extended to medical stents and there is talk of this being extended to other medical devices as well. The cap was always a bad idea since, apart from meddling with the market, it was clear—and that is exactly what happened—that if stent prices were capped, hospitals would increase the tariffs of other procedures in the bypass surgery. Also, since the number of people that bought high-end stents was limited and they were well off, caps in that segment made even less sense. In any case, the government went ahead and when manufacturers wanted to withdraw their stents, news reports suggested the government had directed firms to maintain current volumes in order to prevent a shortage in the market. Eventually, this was allowed after intense lobbying by even the US government—the US Trade Representative even wrote to industry minister Suresh Prabhu and the issue was discussed at the US-India Trade Policy Forum in Washington. At one point, US stent manufacturers had even asked their government to withdraw various preferences given to India. US-based Abbott Laboratories said it would not be introducing its latest ranges of stents in India and that it had got permission to withdraw one range. Boston Scientific Corporation, according to a report in Mint, is also considering withdrawing its high-end stents.
Given this, it is heartening to see the NPPA now asking stent manufacturers for their suggestions on how to go forward on pricing of stents. While it is not clear as to whether NPPA will heed the suggestions, the problem is that various forms of price control—in the case of agricultural goods, this has taken the form of export curbs and stocking limits that force wholesalers/retailers to offload their stocks—seem to have become a default option for the government across a variety of industries; US seeds giant Monsanto put an abrupt halt to new products in India after it was subjected to different forms of this. Eventually, the government has to realize that price controls are a bad idea and have to be exercised only after it is clear there is market failure through cartelisation —that’s where the Competition Commission of India comes in—since this results in reduced supply which is more harmful for consumers. If the government doesn’t get that, it would be fair to say the rethink on stent pricing is just due to US pressure, nothing else.