17 October, 2017
On August 16, 2017, the National Pharmaceuticals Pricing Authority (‘NPPA ’), Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, published an order under Paragraph 19 of the Drugs (Prices Control) Order, 201310 fixing the ceiling price of orthopedic knee implants for primary and revision knee replacement systems (‘Order ’). This Order has primarily been passed by the NPPA as it found that the trade margins for orthopedic-knee implants were unjustified, unreasonable and irrationally high leading to exorbitant prices, making such implants less accessible and affordable to a vast section of patients in India.
Pursuant to the Order, the price of primary and revision knee replacement systems has been capped at a range of . 4,090 (approx. US$ 62) to . 38,740 (approx. US$ 600) and . 4,090 (approx. US$ 62) to . 62,770 (approx. US$ 960), respectively per unit, depending on the feature/material and the component of the knee implant. The capped prices are inclusive of trade margins and exclusive of goods and services tax. The ceiling price has to be complied with for a period of one year from the date of the Order, by manufacturers and importers of knee implants, as well as by hospitals/nursing homes/clinics performing orthopedic surgical procedures using knee implants.
Further, the Department of Pharmaceuticals, by its order dated September 18, 2017 has directed companies to inter alia maintain production/import/supply of orthopedic knee implant systems at the same levels prior to August 2017 and submit a weekly report on the implants produced and distributed. The order is valid for a period of six months.
It is important to note that, similar to the above, the NPPA had published an order on February 13, 2017 fixing the ceiling prices of coronary stents. This was discussed in the April 2017 quarterly edition of the Inter alia … .
10 The Drugs (Prices Control) Order, 2013 authorizes the Government (which powers have been delegated to the NPPA), in extraordinary circumstances, if it considers necessary so to do in public interest, to fix the ceiling price or retail price of any drug (including notified medical devices).
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
