Osteoarthritis (OA) is a type of joint disease with prevalence of nearly 22% to 39% in the Indian population. OA occurs more in women than men, around 45% of women suffer from this disease. Higher rate of OA is associated with ageing (geriatric) population, diabetes osteoporosis, obesity, and sedentary lifestyle. According to the World Health Organization, OA is the prime reason for knee replacement and is set to become the fourth biggest cause of immobility in India. At the same time, Indian elderly population (aged 60 and above) is projected to increase by nearly 41% in 2031, from 138 million in 2021 and the Kerala has highest elderly proportion with 16.5% of state population, as per data provided by National Statistical Office (NSO)’s Elderly in India 2021.
There are various types of surgical treatments for OA joint disease, among them Knee replacement surgeries range from 20%-25% as per voluntary registries controlled by ‘Indian Society of Hip and Knee surgeons’. India is expected to witness high growth of around 15%-20% till 2030 in this segment. Currently, multinational orthopaedic device manufacturers (Stryker, Depuy Synthes, Smith and Nephew and Zimmer Biomet) control around 85%-90% of Indian orthopaedic devices market, which indicates minuscule market share of domestic manufactures. India sees up to 1.5 lakh knee replacement procedures every year.
India’s geriatric population has pressed the need to review the significance of orthopaedic care to its population. The common challenges of an economically weaker population are affordability and accessibility of good healthcare services, in which implant cost is a major factor
India’s geriatric population has pressed the need to review the significance of orthopaedic care to its population. The common challenges of an economically weaker population are affordability and accessibility of good healthcare services, in which implant cost is a major factor. These challenges are also highlighted by numerous complaints received by implant regulators and disproportionately high trade margins especially in Knee and hip replacement implants.
Looking into various challenges, National Pharmaceutical Pricing Authority (NPPA), India’s agency for controlling prices and ensuring availability of medicines, undertook the herculean task of bringing regulation on the pricing of medical devices for public benefits. The price cap on knee implants was fixed by citing a huge trade margin. Subsequently, studies by NPPA confirmed that trade margins were exorbitant (more than 400%) and irrational, which indicated unethical ‘profiteering’ at various levels of distributors and hospitals.
In 2018, NPPA capped the price of cobalt-chromium based knee implants (Fig.1.) at ₹54,720, which is preferred in 80% of knee replacement surgeries and sold in the range of ₹1.5-2.5 lakh, wherein the cost reduction is about 65%. Likewise, the price of knee implants made of titanium and oxidised zirconium was capped at ₹76,600, against the market range of ₹2.5-4.5 lakh. NPPA further instructed that health care providers cannot label a selling price more than ₹56,490 for high-flexibility implant, for which the average market rate was ₹181,728. Also, the ceiling was done for specialised Revision Implants used for cancers, being sold at an average rate of ₹113,950. The NPPA circulated the ceiling price and informed hospitals that overcharging will attract punitive actions, including revoking of licence and heavy penalty.
The knee implantation surgery contributes a part of the medical tourism business in India. India was ranked 7th position in 2017 where 56 million trips were made for wellness tourism and India generated revenue of USD 16.3 billion
Concerned raised by medical community
Orthopaedic surgery in India is considered as less expensive than in developed countries, and overall cost for Knee replacement is lowest in the world, considering the quality. The knee implantation surgery contributes a part of the medical tourism business in India. India was ranked 7th position in 2017 where 56 million trips were made for wellness tourism and India generated revenue of USD 16.3 billion. As per draft of National Strategy & Roadmap for Medical and Wellness Tourism, 2021, India is ranked 10th in Medical Tourism Index (MTI) for 2020-21 out of 46 destinations of the world. There is a fear that the price capping on knee implants may hinder India’s vision “To position India as a sustainable and responsible medical value travel and wellness destination “and “Heal in India” Brand.
The decision of price cap may discourage the international medical device manufacturers to bring innovative products in the market
The private hospitals involved in providing world class health care to patients pointed out that enforcing the price cap will degrade quality assistance and surgeries to patients. It will interfere in the decision to use innovative and better products from the market and may force innovative products to disappear from the market. This will have a negative long-term impact on business and quality treatment. It has been pointed out that the emerging technologies such as patient specific implants and surgeries performed in liaison of, MRI and CT scan, navigation and robotic technology, may receive set back at nascent stage. Moreover, the decision of price cap may discourage the international medical device manufacturers to bring innovative products in the market and may create sudden instability in knee implant logistics.
The Indian government supported its decision by emphasizing that price capping will benefit approximately 1.2 to 1.5 crore orthopaedic patients in India and the decision will lead to a total savings of ₹1,500 crore to patients.
Benefits & opportunity
According to the IMF World Economic Outlook (April 2021), GDP (nominal) per capita of India in 2021 is projected at ₹ 1,59,932 ($2,191) which translates to ₹13,327 per month. The average income of ₹13,327 per month is surely not sufficient for Indians to undergo joint replacement surgeries. Thus, a move to cap the price of knee implants will definitely benefit the majority of orthopaedic patients.
According to the 48th meeting of NPPA concluded on August 14, 2017, about 2% patients in India are undergoing revision and globally the average is around 10%. Thus, the decision to lower the implant cost will ultimately benefit millions of orthopaedic patients, especially in the county where over 1.5 lakh knee surgeries are performed each year. This will further reduce the rise in out-of-pocket expenses for patients undergoing knee implant surgeries. It was also suggested that the government shall initiate measures to promote domestic knee implant industry in manufacturing, product logistics and innovation. This can be done through various ways, such as encouraging entrepreneurs to invest in the orthopaedic domain, providing grant-in-aid, pioneering orthopaedic research park, encouraging public-private partnerships etc. These measures will help bridging the quality gap pointed out by medical communities.
At this point of time, it may be early to evaluate the benefit of the price cap on the Indian population. We may have to wait and watch how things pan out with time. But we should applaud the effort of the government to regulate the cost of knee implants to ensure good health services to the marginal strata in the country.
Composed by: “Er. Arvind Kumar Prajapati is a Scientist/Engineer at Sree Chitra Tirunal Institute for Medical Sciences and Technology (SCTIMST), Department of Science and Technology, Government of India, Trivandrum, Kerala. He has been closely working in design, development, testing and validation of Knee, Hip, and Spine implants and instruments.”