Resentment appears to be growing among multinational medical device companies over India's decision in February to slash reimbursement for drug-eluting stents.
The Business-Standard reports that as details emerge over the new policy, device companies are increasingly unhappy, viewing the new policy as a particularly vexing challenge for companies such as Medtronic ($MDT), Abbott ($ABT) and Boston Scientific ($BSX) seeking to grow their market there. An unnamed source told the newspaper that international device companies are angry they (or patients, apparently) weren't consulted first about the new policy. And they worry that that kind of insular public-policy making will curdle new investment or innovation in the country.
That industry unease comes as final details have emerged about the new reimbursement drop--the second since 2011, and the final government price revisions reflect a big drop. Drug-eluting stents approved by India's regulators and the FDA are capped at 25,000 rupees ($461.63), versus 65,000 rupees ($1,200) before, according to the story. CE marked drug-eluting stents were previously covered at 50,000 rupees ($923.27), but they're now also capped at the 25,000-rupee figure. Bare metal coronary stents will be covered up to 12,000 rupees ($221.60) by the government.
The goal, of course is a noble one--to make stents more affordable for patients who need them. But as the article notes, patients seeking to ensure quality who can afford it may end up paying out of pocket--between 100-200 times as much. Though most companies sell their stents directly through hospitals, the story explains, so the reimbursement cut will be a major hit.
And while local stent makers stand to gain (their products are generally cheaper), multinational medical device companies will have to decide if the new reimbursement reality in India is simply the cost of doing business there, a government policy they can lobby to change, or a reason to pull back from a market that otherwise has enormous potential for growth. Device companies view emerging markets as a way to grow sales of stents that have become stagnant in Europe and the U.S., and India's move offers a direct challenge to that strategy. There's more to come, no doubt.
- read the Business-Standard story