Necessary limit

Wed 22 Feb 2017


Capping the prices of medical stents, which are used to treat coronary artery disease, by the National Pharmaceutical Pricing Authority (NPPA) is an extreme regulatory measure necessitated by the market failure that afflicts the overall delivery of health care in India. Rising costs have led to impoverishment of families and litigation demanding regulation. Given the overall dominance of private, commercial, for-profit health institutions, and the asymmetry confronting citizens, correctives to bring about a balance are inevitable. Two important pointers to the need for cost regulation are available from research published in The Lancet in December 2015: nearly two-thirds of the high out-of-pocket expenditure on health incurred by Indians went towards drugs; even the meagre research data available showed that there was irrational use of medical technologies, including cardiac stents and knee implants. Regulated prices can, therefore, be expected to make stents more accessible to patients who really need them, helping them avoid using up the weak insurance cover available, while also reducing the incentive for unethical hospitals to use them needlessly. It is worth recalling that there are over 60 million diagnosed diabetics in the country, and the average age at which the first heart attack strikes Indians is 50, a decade earlier than people in developed nations. At appropriate prices, and with a health system that pools the cost among all citizens, it would be possible to provide access to stents and other treatments for all.

Health-care providers often demand market-determined pricing of medical technologies on the ground that newer ones will not be available under a regulated regime. In the case of cardiac stents, this argument does not hold water since stakeholder consultations held by the NPPA in January revealed that there are ‘huge unethical markups’ in the supply chain. It would serve the cause of medical innovation if costing is transparent, and a system of risk pooling is introduced to help patients get expensive treatment without high out-of-pocket spending. It was estimated five years ago by the Planning Commission’s expert group on universal health coverage that raising spending on public procurement of medicines to 0.5% of GDP (from 0.1%) would provide all essential medicines to everyone. What is necessary, then, is for a two-pronged approach to improve access to medicines and technology. The Centre should monitor expenditures jointly in partnership with the community, use regulation where needed, and raise public spending on health. Several developing countries have moved ahead on this path. Well-considered price control is a positive step, but more needs to be done. The latest measure provides an opportunity to expand the availability of stents, and by extension angioplasty procedures, in the public health system. District hospitals should offer cardiac treatments uniformly. This should be a priority programme to be completed in not more than five years.

[source:TheHindu]

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