A day after PM Narendra Modi announced in his Independence day speech that prices of knee surgery would be brought down, country's drug price regulator - National Pharmaceutical Pricing Authority (NPPA) fixed the selling price of knee implants from Rs 54,000 to Rs 1.14 lakh, almost 70% lower than most surgeries now cost.
With private hospitals reportedly charging exorbitant rates, the government capped the maximum retail price of the keen implants, a move that will save patients an estimated Rs 1,500 crore annually.
This decision is expected to lead to a saving of Rs 1,500 crore per year for the people of India, union minister for chemicals and fertilizers Ananth Kumar said.
Special knee implants for cancer or tumours will follow the prices of revision knee implants, NPPA said.
"Based on the numbers of about 1 to 1.5 lakh orthopaedic knee procedures done in India every year, there will be a saving of about Rs 1,500 crore for the people of India per annum".
As per the WHO, by 2020, osteoarthritis is going to be the fourth largest cause of immobility in the world.
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They also argued that price capping alone would not benefit patients as hospitals would push up costs of the procedure to make up for loss of trade margins. Under the new price regime instituted by The National Pharmaceutical Pricing Authority (NPAA), the MRP of the most popular cobalt-chromium implant has been fixed at Rs 54,720.
The prices of ortho knee implants used in knee replacement surgeries will get cheaper from 30 percent to 78 percent on an average depending on the type and material of implants. "Also, the Government and NPPA should ensure that healthcare providers are given some incentive for operating in areas that have no specialised care and have to deal with procurement of the implants, lack of vendors and making the doctors available", he added.
The standard and most widely used complete knee implant will not cost more than Rs 54,720 now, down 65%. "Government has to ensure that the quality of knee implants do not go down", said Balvinder Singh, an orthopaedic surgeon with the Jammu and Kashmir Health Services.
Asked whether industry would be able to recover their costs under the new prices, the minister said: "The MRP has been fixed after taking into account the landed cost and there will be comfortable margins for the industry".
Total knee implants made of special metals like titanium and oxidized zirconium can be priced at a maximum of Rs 76,600, or 69% lower than the original average MRP. High flexibility implants and revision implants for second surgery will come down from Rs 1,81,278 and Rs 2,76,869 to Rs 56, 490 and Rs 1,13, 950 respectively, down 69% and 59% respectively.
According to some knee implant manufacturers, the order has left a lot of issues unresolved without which the price cuts might not be possible. In consultations with NPPA, importers and manufacturers justified higher prices saying they needed the higher margins to enable payment to distributors and hospitals (including doctors) in the existing business model.