* Global med-tech firms nervous about India price controls
* Companies plan to step up lobbying efforts, sources say
* Execs say price caps put investments at risk, curbs
* India says ensuring affordability for patients more
By Aditya Kalra and Zeba Siddiqui
NEW DELHI/MUMBAI, April 28 A group of global
medical-technology companies plans to tell Indian officials next
month that any further price control measures would risk future
investments and make them less likely to introduce new products
in the country, according to an industry source familiar with
The lobbying effort by Abbott Laboratories, Boston
Scientific, Johnson & Johnson and others comes
after the government of Prime Minister Narendra Modi in February
set a price cap for stents - small wire-mesh structures used to
treat blocked arteries - slashing prices that patients pay for
some devices by about 75 percent.
That has sparked a growing showdown between the companies
and Modi's government in India, where the "med-tech" sector is
worth $5 billion. Abbott and Medtronic filed for
withdrawal of some of their stents from India, but the
government on Wednesday rejected their request, saying it
contravened the nation's drug laws.
Modi has in recent years taken a more aggressive stance
against multinational healthcare companies, announcing price
curbs on drugs used to treat critical ailments such as cancer,
HIV/AIDS and diabetes.
At a public event this month, the prime minister said
patient interests were more important than "unhappy" companies.
The firms, meanwhile, worry price controls could extend to
other devices such as implants or valves, making it economically
unviable for them to sell next-generation products in India,
industry sources said.
Executives from Abbott, Medtronic and Boston Scientific -
which all sell coronary stents in India - along with Johnson &
Johnson and others, plan to approach India's health and trade
ministries in May to convey that "price control is not the way
forward", according to an India executive at a multinational
med-tech company aware of the plans.
"There is a lot of nervousness," the executive said.
Johnson & Johnson, for example, is worried about potential
price curbs on its imported knee, joint or hip implants, another
industry source said, adding the company was working with trade
groups to write letters to the government.
Boston Scientific said it was engaging with the government
and would abide by regulations.
Medtronic said it intended to again file a plea for
withdrawing one of its stents. Abbott said it was speaking with
the government to file for withdrawing two stents and would look
at reintroducing them if they became "commercially viable".
Johnson & Johnson declined to comment.
Another industry source aware of companies' strategies said
the withdrawal pleas were aimed at sending a "strong signal" to
the government by disrupting access.
None of the companies commented on planned government
meetings or broader industry worries.
National Pharmaceutical Pricing Authority (NPPA) Chairman
Bhupendra Singh on Thursday sought to calm industry concerns,
saying the authority was in the process of collecting price
information for 23 devices but "as of now there is no proposal
to cap the prices".
Singh, whose agency is the government's drug pricing
regulator, declined to comment on industry jitters or lobbying
COSTS VS ACCESS
The domestic medical device market in India is expected to
grow by 15 percent annually between 2014 and 2020 to $8.6
billion, according to a joint report by consultants Deloitte and
Healthcare Federation of India, NATHEALTH.
Rana Mehta, leader of healthcare at consultants PwC India,
said many firms had started re-evaluating their India strategy.
"This uncertainty might be detrimental to the growth of the
industry," said Mehta, who advises several multinational
Abbott and the Medical Technology Association of India,
which counts Boston Scientific among its members, have in the
past fallen short with their lobbying efforts in New Delhi,
according to documents seen by Reuters.
In letters written to the government departments of health
and pharmaceuticals during August and September, they appealed
to Indian officials to have a more liberal approach on stent
pricing and not treat all stent devices as the same, submitting
dozens of pages of research papers and clinical studies in
Abbott wrote this would "encourage" medical device
But the pricing regulator NPPA ruled against their requests.
In February, it termed stents as "essential" devices, noting
cases of heart disease were rising and the stent pricing was
"restrictive and exorbitant". It did not differentiate among
types of drug-releasing stents as the industry desired.
The price cap was set at 7,260 rupees ($113) for the older
generation metal variants and 29,600 rupees ($461) for
Abbott said it was "disappointed" with the decision. An
executive at the Medical Technology Association said different
types of drug-releasing stents should be treated differently.
Activists have lauded the government's action on stent
pricing, saying reduced prices would benefit the masses.
"The government intervention is expected to end exploitation
of patients," health activist K.M.Gopakumar said.
But some in the healthcare industry disagree.
"Considering affordability is important but not at the cost
of putting brakes on the evolving technology that is so
essential to ensure patients' well-being," said Shirish
Hiremath, president of the Cardiologist Society of India.
(Editing by Tom Lasseter and Alex Richardson)