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August 24, 2017updated 22 Nov 2018 11:32am

India’s price cap on knee replacement implants threatens innovation

Following a move to fix price ceilings for coronary stent products, India’s National Pharmaceutical Pricing Authority (NPPA) has announced a plan to cap the pricing of orthopedic knee replacement implants.

By GlobalData Healthcare

Following a move to fix price ceilings for coronary stent products, India’s National Pharmaceutical Pricing Authority (NPPA) has announced a plan to cap the pricing of orthopedic knee replacement implants.

This effort will help make medical devices more affordable for the general population, reducing the cost of a standard primary knee replacement implant by up to 69%. The cost of a revision implant will also be cut by approximately 59%. 

India’s market for knee replacement implants was valued by GlobalData at approximately $266m in 2017. It is largely composed of imported products manufactured by large, multinational conglomerates. Some of the market’s major players include DePuy Synthes, Smith & Nephew, Stryker, and Zimmer Biomet.

While the NPPA maintained that all manufacturers would continue to provide knee replacement devices and no disruption to implant supply would be noted, it is likely that the availability of innovative and technologically advanced knee replacement systems will suffer due to the price ceilings. This puts an enormous spotlight on local manufacturers to produce high-quality implants that can be utilised in place of the traditional implants from foreign competitors.

Despite the aforementioned effects on the competitive landscape, the pricing cap is a fortunate change for the many citizens who do not have any healthcare coverage and have to pay medical expenses out-of-pocket. These circumstances keep numerous patients from seeking treatment each year. The price reduction on knee implants aims to remedy this situation by expanding patient access to much needed joint replacement procedures, particularly as the country’s elderly and arthritis populations are growing.

The question of how to maintain innovation and provide access to premium implant systems in the Indian knee replacement market remains. One solution allows patients with the financial means to choose higher quality or more technologically advanced implants, which would keep foreign competitors active in the market while also increasing general patient access to knee replacement procedures. Similarly, having separate pricing caps for different categories of knee replacement implants would permit patients a choice and keep companies from pricing innovative solutions out of the market.

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