Capping stent prices at Rs 35,000 is a good move by Narendra Modi govt, but will it stem corruption?

Prime Minister Narendra Modi is proud at having tamed multinational prostheses manufacturers at least partially. For instance, the price of a coronary stent that is often used as an effective substitute for a more invasive bypass surgery has been capped at Rs 35,000. The jury is still out on whether it was a right move as some of the reputed brands have voted India with their feet saying it is unviable for them to sell at such a ridiculous price. But the government’s argument was patients and their families in distress were taken for a ride by the hospitals. Hence it went for the hospitals’ jugular by assuming that all, in any case, would go for the affordable. But doctors counter this by saying there are stents in the market with bioresorbable ones being hailed as the most compatible. Naturally, these would be expensive in the range of Rs 2 lakh to Rs 3 lakh.

But the price is not the only counter when it comes to health. Quality matters too. Over two years, the US Food and Drug Administration (FDA) recalled at least 117 medical devices that were distributed globally after concluding that they led to serious health issues, including death in several cases. At the time of recall, at least 57 of these devices were being marketed in India.

Johnson & Johnson leads the pack with faulty knee and hip implants. It has had the mortification of paying compensation in millions of dollars in other parts of the globe including Australia but has been looking askance at India thanks to a weak regulatory oversight.

 Capping stent prices at Rs 35,000 is a good move by Narendra Modi govt, but will it stem corruption?

Representational image. Reuters

It has taken the US market watchdog, the Securities and Exchange Commission (SEC), to confront a prostheses manufacturer, Stryker that has offices in Delhi, Mumbai, Kolkata and Chennai. Apart from selling knee and other implants to Indian hospitals and through them to gullible patients, it has also been bribing the system. In a filing two months ago, the SEC ordered the world’s leading manufacturer of orthopaedic implant devices, Stryker, to pay $7.8 million (over Rs 55 crore) in settlement for violating the country's corruption norms in India, China and Kuwait. These underhand and stealthy payments were revealed in an audit ordered by the SEC when Stryker was at its wits’ end explaining the hefty but dubious payments. Its brazenness in playing ball with Indian hospitals also consisted of obliging them with inflated bills, an obvious way for Indian promoters to make money through over-invoicing. Needless to say, the promoters of Indian hospitals would have been given matching kickbacks through dubious foreign bank accounts.

The US has strong laws that frown on bagging businesses abroad through stealth and corruption. The Indian government must immediately swing into action taking a cue from the SEC initiative. For all one knows Indian hospitals succumbing to foreign companies’ overtures might have also agreed to compromise on quality. It is not as if the Indian regulators haven’t had a clue about the modus operandi of the foreign medical devices companies.

In 2012, the anti-monopoly regulator, Competition Commission of India (CCI), fined an authorised distributor of Stryker India and two other firms Rs 3 crore for allegedly rigging bids, manipulating tenders and forming a cartel to sell equipment to the All India Institute of Medical Sciences (AIIMS) and Safdarjung Hospital, two of the largest government hospitals. Alas if only it had alerted its fellow regulator on the technical and quality front the Central Drugs Standard Control Organization (CDSCO). We suffer from the right-hand left-hand syndrome. CIC ought to have taken a more holistic view and suspected foul play on other fronts too including quality.

(The author is a senior columnist and tweets @smurlidharan)

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Updated Date: Nov 28, 2018 12:48:14 IST