INDIA APPLIES PRICE CONTROLS TO KNEE PROSTHESES

Yesterday, India’s National Pharmaceutical Pricing Authority (NPPA) implemented price controls for knee prostheses resulting with an average reduction of 65% from prevailing market prices. The announcement was published on August 16, 2017, with immediate effect (full document available on the India page of Asia Actual’s website).

In this Notification, Maximum Retail Prices (MRP) are specified by material of construction, intended use (primary vs. revision vs. salvage) and components used in the systems. Pricing is fixed for a period of 12 months from the date of order, until revised by further order or gazette notification. The NPPA will monitor the situation closely and may make adjustments to assure supply.

There are 14 foreign manufacturers with 30 active Product Registration Certificates that include knee systems that will be most affected. Additionally, there are 12 domestic companies with manufacturing licenses listing knee replacement systems.

Prices of orthopedic implants had been under government scrutiny since the MRP of cardiac stents were capped in February 2017.  For now, hip replacement implants, trauma implants and spinal implants will not be affected. It is expected that pacemakers, heart valves, intraocular lenses, or PTCA balloon catheters are next in line for price cap consideration.

With this action, the NPPA fast-tracked the review process by invoking a special ordinance in the Drugs Price Control Order (DPCO).  This circumvented the time-consuming deliberations by other government ministries normally required.

The market is expected to go through some rationalization in reaction to the price cuts. It is likely that some high-cost providers reducing their participation in the market. Low cost suppliers and those with high sales-channel efficiency will be greatly advantaged in this new market environment.

Asia Actual is available to help companies understand and stay compliant with the NPPA’s statutory price reporting requirements.

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