AdvaMed turns to White House to intervene in stent price cap dispute with India

The U.S. medical device lobby in Washington is asking the White House's top trade official to strip away a coveted favorable-trade status for goods from India following Indian officials' refusal to lift price caps on imported heart stents and knee implants.

Earlier this year, India's National Pharmaceutical Pricing Authority capped prices for heart stents at levels that U.S. manufacturers say causes them to lose money on most stent sales. When stent companies Abbott Laboratories, Boston Scientific and Medtronic requested permission to stop selling stents at a loss, the Indian government refused to let them withdraw, and then went on to add new price caps for knee implants.

Price caps for other medical devices are now under consideration in India. Meanwhile, other developing nations like China are closely watching the prices that India is getting for imported medical devices, which India may soon require to be posted on the outside of medical device packages. Indian officials say the price caps came in response to rampant "profiteering" for common medical devices that work no better than older, cheaper models.

Med-tech trade group AdvaMed on Tuesday submitted a petition to the U.S. trade representative asking for the removal or modification of India's benefits under the United States' Generalized System of Preferences (GSP) program, which removes fees on certain goods imported from India.

"AdvaMed is deeply concerned that this is just the beginning of a trend in India," the organization wrote in its petition. "India's unreasonable price control levels, combined with this [price-]printing requirement, would represent an existential threat to the U.S. medical device industry if other countries depressed prices to India's levels."

Heart stents, which are small metal tubes used to reopen blocked coronary arteries, are among the most common implantable medical devices in the world. AdvaMed said prices on higher-end stents in India dropped up to 85 percent after the price controls, with even the most expensive drug-eluting stents limited to prices equivalent to about $450. In the U.S., drug-eluting stents are listed for about $1,200 apiece, though prices vary widely.

India's medical device market accounts for just $6 billion in annual sales, with 30 percent of that coming from devices made by U.S. companies. But fast-growing nations like India and China are coveted sites of future growth by medical device makers, which see expansions in the middle class tied to more citizens being able to afford care or gain insurance coverage.

GSP, meanwhile, is a system designed to support sustainable local economic growth in developing nations like India by lifting U.S. import fees on 5,000 different products. India is the largest beneficiary under the GSP program, with $4.7 billion in benefits last year on imports of Indian plastic bags, chemicals, auto parts, pickles and other goods, a USTR official said via e-mail.

GSP is run by the office of the U.S. trade representative, which is headed by Robert E. Lighthizer, an international-trade lawyer who was confirmed in May.

During a June 22 meeting before the House Ways and Means Committee, Lighthizer told U.S. Rep. Erik Paulsen, R-Minn., that U.S. officials have already pressed the Indian government to address the U.S. medical device industry's "horror stories" about the price caps on stents.

"This, to me, fits into the category of things that if you have a big trade surplus with the United States, you should not be doing things like this to the United States," Lighthizer told Paulsen, according to a transcript. "They should be trying to encourage imports from the U.S."

The dispute with Indian health regulators over prices has been brewing for years. In 2016, Indian officials placed coronary bare-metal and drug-eluting stents on their list of "essential" medicines, starting a process that would eventually allow the government to set maximum prices and prohibit manufacturers from withdrawing from the market.

The subsequent investigation concluded manufacturers were asking for higher prices for their stents without valid clinical data showing the devices produced better outcomes than cheaper versions.

Asked for comment about the issue in June, Bhupendra Singh, chairman of the National Pharmaceutical Pricing Authority, told the Star Tribune in an e-mail that what the government did was slash the medical device makers' high markups on stents to make them more affordable. Most patients in India lack insurance coverage.

AdvaMed officials argue that local hospitals add far more markup than device makers do, but the government hasn't taken steps to curb them. They also note that the Indian price policy seems designed to help stent companies in India at the expense of outside companies

Joe Carlson • 612-673-4779