Abbott's stent withdrawal plea rejected

NPPA asks company to prove superiority and then fix higher price

The National Pharmaceutical Pricing Authority (NPPA) has rejected US-based stent maker Abbott’s application to withdraw its high-end stents from India on technical grounds, asking it to re-apply if it still wanted to pull out. But, the rejection has come with a possible sweetener. In an indication of a softening of stand, the NPPA on Wednesday told Abbott that it should prove the superiority of its stents if it wanted a better price. 

At present, the price cap at Rs 29,600 is meant for all stents, irrespective of make and origin.           

Following a meeting at the NPPA on Wednesday, it issued a memorandum that Abbott’s application was not in the requisite format and was therefore rejected. The NPPA also alleged that the company had not been sending the government a weekly report of production and distribution of stents in the country. In February, the government invoked Section 3(i) of the Drug Price Control Order, mandating stent companies to keep a certain level of production and distribution in the country. The order, which was enforced to prevent shortage of stents in the market following capping of the price, expires at the end of August. 

While rejecting Abbott’s application, the NPPA said the company may apply for withdrawal two weeks before the expiry of the order.  

In a move that has surprised the industry, the pharma pricing authority has asked Abbott to present a case by proving superiority of Absorb (a type of high-end stent), should it want a better price.

The office order stated, "The company is advised to explore options of price revision provided under para 11(3), 11(4) and para 19 of the Drug Price Control Order." Under these clauses, companies can claim a higher ceiling price of a drug/device, if its superiority can be proved over others. Analysts pointed out that these provisions have been used earlier in the case of condoms and IV fluids. 

The NPPA fixed the price of all drug eluting stents at Rs 29,600 in February despite opposition from multinational stent makers including Abbott. These companies told the government that their stents were superior to domestically-manufactured stents. Abbott had sought immediate relief from the Indian market citing that Absorb wouldn't be commercially viable at Rs 29,600.  Absorb is believed to be the most recent generation stent available in the market. 

The Authority has also told the company that if the withdrawal of high-end stents was on safety grounds, it may apply for a fresh application stating safety and efficacy related issues. Abbott's Absorb has been under the Indian safety regulator's lens after advisories from its global counterparts. 

In response to Business Standard's query on rejection of its withdrawal application and the option to revise prices, the company said," we are reviewing the memorandum issued by the NPPA."

Absorb is Abbott's novel stent that leaves no residue once it heals a blockage. This is different from other stents that leave metal behind after healing a blockage. Apart from Abbott, Medtronic also filed an application with the NPPA to withdraw its highend stent— Resolute Onyx.