Price caps hurting healthcare industry, says Preetha Reddy

The National Pharmaceutical Pricing Authority’s decision to cut prices of stents and knee implants is hurting the healthcare industry, prompting investors to pull out, Preetha Reddy of the Apollo Hospital Group told ET in an interview.

The vice-chairperson of India’s largest hospital chain highlighted concerns that the public perception gaining ground -of an industry run by bandits -has led policymakers to take decisions that hurt the sector. “Investors are pulling out, which means cash will slowly go.Costs are rising because there is real estate, labour and then, GST. If you have to pay tax, you have to pay. You make us pay a lot, we are perceived as bandits and somewhere what is happening is that we are questioning, Rs Should we expand or should we just put our money overseas?'” said Reddy. While all these decisions take shape, India’s disease burden is growing, “so we are heading for trouble,” she added.


The medical device industry has spoken out against the drug pricing regulator’s move to cut the price of cardiac stents and knee implants by 80% and 70%, respectively. The regulator’s stipulation has forced some device makers to pull out their high-end products from the Indian market. “Any policy that impedes innovation will not only make Indian innovators non-competitive in global markets but also deter global organisations from making their latest products available to the Indian patient population,” AdvaMed, a lobby group of medical device companies, had said days after the price cut.

The National Pharmaceutical Pricing Authority (NPPA) has warned of penalising hospitals not following the price cut directive. Reddy agrees that this has hit hospital revenues from these devices but feels it can be absorbed.

Apollo is more bothered with the decision of multinational device makers to pull out their high-end products from the Indian market, which will hurt medical tourism.”Those who want high-end stents are paying 10 times the cost and flying out to places like Dubai, Sri Lan ka and Singapore. In a way, we have cut our nose to spite our face,” Reddy said. Reddy was, however, optimistic about Apollo’s prospects as the bulk of the group’s revenues come from intensive care, emergency care and other surgeries. In the quarter ended June 2017, Apollo Hospitals posted a 51% decline in net profit to Rs 35 crore.


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