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One of the signs of a healthy heart, they say, is that you don’t even notice it. The same could be said about scams: whatever be the size of the swindle, it’s roaring business as long as it passes under the radar. An ongoing scam of huge proportions popped briefly into view on December 7 when the Delhi High Court ordered the Department of Pharmaceuticals (DoP) and other parties to fix and label the maximum retail price (MRP) of every cardiac stent, used for angioplasties, sold in India.
Cardiac care is anyway an area where patients often bear a double cross, pun intended. To begin with, they are desperate to live; and then, being mostly medically illiterate, they are totally at the mercy of the experts. But it’s frightening to think one of the reasons why angioplasties are prescribed so routinely could be because there’s a lot of money flowing through that small metal or plastic tube that’s placed in the patient’s arteries. Without an MRP, says Birender Sanghwan, advocate, consumer activist and the petitioner in the case, patients are charged anywhere between 300-700 per cent of the price at which the hospital would have bought it.
December 22 is the date for fixing prices given by the twin bench of Justices Sangeeta Dhingra and G. Rohini. But Sanghwan, whose third petition since 2014 finally bore fruit, is bracing for a longer battle—he’s almost sure the manufacturers’ and suppliers’ lobby may well contest it. Cardiac stents, mostly manufactured by multinational companies, are usually supplied directly to hospitals; often without an MRP, making it easy for hospitals as well as doctors to make a hefty profit.
In June, stents were brought under the national list of essential medicines by the DoP (which is under the ministry for chemicals and fertilisers, and not health). No steps have been taken, though, to cap their prices so far. Sanghwan alleges the delay is due to a nexus of stent manufacturing companies and doctors, who benefit from bribes and cuts. In the interim, thousands of patients and their kin remain vulnerable to exploitation.
When legal researcher Shirin Syed’s father suffered a cardiac episode, she rushed him to a leading private hospital in Aurangabad. After a quick examination, without an angiography, the doctors “diagnosed” three blockages, and prescribed angioplasty. When Shirin enquired about the price of the stents, the head cardiologist shrugged it off, saying it was an emergency case. After the surgery, when Shirin went to collect the medical reports and pay the bill, she was shocked to find that while only one stent had been placed, the bill mentioned two.
The doctor in charge tried to explain it away by saying they had not been able to place the second stent, but the family would have to pay for it as it had been deployed, but did not work. Aware that she was being cheated, Shirin asked the doctors to give her the other stent to take home. Only then did the doctor agree to reduce a small amount, allegedly the cost of the second stent, in the bill. The final bill of Rs 2,69,279, however, did not mention either the brand or the per unit cost of the two stents, which had been listed as ‘consumables’ costing Rs 1,17,670.
The use of cardiac stents in India has been growing rapidly at 25 per cent annually, adding to the concern whether it is at all warranted in many cases (see interview of Dr M.S. Valiathan). Many consumer activists have alleged that doctors and hospitals make a killing through indiscriminate use of stents for which they receive a cut either through a huge mark-up in the price or as bribe. In 2015, as many as 4,20,000 angioplasties were performed in the country, according to the Cardiology Society of India.
The need for an angioplasty, according to DraftCraft founder and solicitor Gajanan Khergamker, arises only under certain circumstances—and it should rightfully be the patient’s call. “Whether or not an angioplasty is required is to be decided by the patient after being provided full and complete information, as far as possible, by the medical practitioner,” he says. “A patient’s consent to angioplasty or any procedure obtained by ‘coercion’, ‘force’ and ‘undue influence’ qualifies as ‘forced consent’ and is not ‘free consent’ as laid down in Section 14 of the Indian Contract Act, 1872.” Yet, informed consent is mostly an abstract ideal in India—the norm, it seems, is what would qualify as a form of coercion.
Multinational firms dominate the cardiac stent market in India, with over 80 per cent marketshare. Their huge resource base enables them to woo doctors with bribes for every stent deployed in order to increase sales and, in turn, profits. The cost of procuring one stent is in the range of Rs 20,000-25,000, according to legal researcher K.M. Gopakumar of the Third World Network, which specialises in pharmaceutical research. Yet patients have to pay anywhere between Rs 50,000 to Rs 1.5 lakh for drug-eluting stents—the most common kind used in angioplasty operations.
In a complaint filed with the health ministry and the DoP, Gopakumar has accused a leading hospital in Kerala of overcharging on stents. In 2014, Gopakumar’s father was advised angioplasty as he needed three stents. The super-speciality facility quoted a price of Rs 95,000 for each stent. In a bid to lower his costs, Gopakumar decided to contact Abbot Laboratories Ltd in Delhi, which was supplying stents to the hospital. He was shocked to learn that the distributor’s price was only Rs 27,000.
When Gopakumar approached the cardiac specialist handling his father’s case, he insisted the stent cost would not be lowered and it would have to be procured from the hospital if the procedure was done there. So far, no action has been taken on his complaint against the hospital either by the Kerala medical department or central authorities. According to Gopakumar, the huge profit (in this case Rs 57,000 per stent) is shared by the hospital and the cardiologIST as premium over and above the procedure’s cost. “The whole transaction works on a well-woven system of interdependence and quid pro quo.”
The hospital, on its part, denied the allegation, and even said it gave the patient one of the three stents for free. The “average cost” per stent works out to Rs 58,133, it said in its response to the complainant; “hence the margin towards handling charges is practically nil.” Not allowing direct purchase of medical equipment by patients from outside sources is part of its policy, it added.
Sanghwan contends that the system of bribes is enabled through the presence of medical representatives and distributors in every hospital. “Hospitals where well-known cardiologists practise are generally swarming with medical representatives who work to ensure that doctors use their companies’ stents. This practice of allowing medical reps within hospitals is illegal under the medical code of conduct, yet it takes place rampantly,” he says.
Outlook got in touch with one distributor of foreign stents, who confirmed that such practices involved almost every hospital and the best-known cardiologists. “The cardiac stent industry is a comparatively small one resulting in smaller channels. The only middlemen are distributors who are responsible for paying doctors and big hospitals to push the costlier stents over the cheaper options available,” he claims.
Multinational brands supply the stents to distributors, who in turn supply them directly to hospitals. The onus of pushing sales and using bribes to achieve targets lies with the distributors, who approach doctors as well as hospitals to make them choose one brand of stent over competing brands. The usual cut for doctors, according to Sanghwan, is anywhere between 20-25 per cent of the cost at which the stent is supplied to the patient. The cuts, according to industry insiders, are paid out in the form of cash, material benefits such as foreign trips or gifts such as cars and EMIs on property bought by doctors.
The distributor Outlook spoke says he has witnessed several medical representatives of multinationals firms deploying exorbitant forms of bait to lure doctors: gifts as well as foreign trips under the guise of medical conferences. With such incentives involved, a lot of doctors tend to opt for costly stents, despite cheaper versions with the same benefits being available in the market. “So far, no independent study has been done to prove the superiority of one stent over the other,” says Gopakumar. “Yet hospitals and doctors charge higher amounts for new stents that have entered the market listing greater health benefits, which the patient has no means to vet.”
The bribes are usually adjusted into the hospitals’ expense accounts to cover tracks or paid directly to doctors in cash. Amitava Guha of the Federation of Medical and Sales Representatives of India recalls being told of clandestine cash exchanges between distributors and doctors of a leading hospital chain. An agent working for one of the biggest distributors in the country informed Outlook that, in his entire career, only 10 per cent of the doctors he approached with bribes declined it. “Sadly, this small number figures is no well-known private practitioner,” he claims.
An Aurangabad hospital asked the family of a patient (in pic) to pay for a second stent that it never placed. A demand to take the device home led to a minor discount, but the bill did not mention its cost or brand.
One unfortunate fallout of the system of bribes and benefits is the indifference of doctors to the quality of stents being deployed. “Almost all the information on research and development available to the doctors is actually what has been provided to them by big companies manufacturing these devices. They are stakeholders who stand to benefit the most,” says Pune-based Dr Anand Gadre. “Most medical conferences are now completely sponsored by manufacturing companies. No innovation or advancement in any medical field is vetted by an independent, government or industry body.” Medical conferences hosted by multinational companies are often in scenic locations overseas, which double as family vacations on company expenses.
Crucially, the quantum of bribes paid to doctors depends on the quality or price of the stent as well as the quantity—a factor that logically, and alarmingly, ties up with the spike in angioplasties in Indian hospitals. There’s no knowing how many of them were warranted: routinely, patients are given little or no time to get an unbiased second opinion and have to rely on the hospital’s advice. Ashok Kumar Bhargav, an activist from Lucknow, says most doctors prefer keeping patients in the dark about why a procedure is required. “Situations are created by the cardiologist wherein the family is made to give immediate consent for procedures that might not be required. The emergency-like scenario created gives them little choice or opportunity for seeking a second opinion or even think over the matter,” he says.
The numbers are revealing. For instance, Ruby Hall, one of the biggest cardio-speciality facilities in Pune, conducted 25,000 angioplasty operations last year, according to Dr Shirish Hiremath, the hospital’s chief cardiologist. In sharp contrast, only 1,958 angioplasties were performed at the All India Institute of Medical Sciences, Delhi, during 11 months of the 2014-15 fiscal till February. Thus, if we take that as a benchmark, a standard private hospital can do 12 times the number of angioplasties done at AIIMS, India’s premier government hospital. An angioplasty procedure at Ruby costs Rs 1,20,000—plus the cost of the stent, which varies from Rs 75,000 to Rs 1.7 lakh.
The total absence of a regulatory framework and the irregular pricing of the procedure as well as stents is a major cause of concern for medical insurance providers. Pradeep Khandekar of the state-run New India Assurance Company says, despite gaping differences, insurance firms are forced to settle unrealistic bills that they have no way of verifying. “The insurance side is regulated by the government, but no regulations exist for doctors’ charges. This means our hands are tied when we negotiate claims with doctors and hospitals,” he says. Once a claim has been generated, Khandekar says insurance companies have no options available to prove malpractice.
The lack of government action—including price control—is despite the fact that the rampant malpractices within the cardiac stent industry are hardly a secret in official circles. Bhupendra Singh, director of the National Pharmaceutical Pricing Authority (NPPA), agrees. “There needs to be a system in place to regularise the prices of such procedures and those of stents. While stents are now under the NLEM (National List of Essential Medicines), the cost of procedures varies considerably,” he says. The NPPA is responsible for setting the ceiling price for the NLEM.
The official says the issue has not been addressed by the DoP despite the NPPA having sent two expert panel committee reports on the pricing mechanism for stents. “According to procedure, two committees chaired by a group of experts filed recommendations four months ago but the NPPA’s hands are tied until the DoP puts stents under schedule 1 of the NLEM for us to start price control,” Singh says, expressing the hope that there would be progress under the Health For All plan proposed by the government.
“It’s important for stents to come under the NLEM so their ceiling price can be fixed,” says Dr K.K. Aggarwal, president- elect, Indian Medical Association. “Additionally, the IMA has also asked that stents be made available in Jan Aushadhi Kendras everywhere.” He has another valuable suggestion: “Patients must be given the opportunity to buy the devices independently instead of relying on hospitals. This will make the chain of supply much clearer, cutting out exaggerated costs.”
The primary reason for delay in reforms, alleges Malini Aisola of the All India Drug Action Network (AIDAN), is the strong lobby of doctors who are against price regulation in the cardiac stent market. “Price regulation will ultimately cut down profit margins and make the supply chain far more transparent, thereby stopping the bribes and huge mark-ups that fuel the industry at the moment,” Aisola says.
The minutes of NPPA meetings to discuss the inclusion of cardiac stents in the NLEM, shared by AIDAN with Outlook, reveal how three of the biggest cardiac specialists including Dr Hiremath from Pune’s Ruby and Dr Tejas Patel from Ahemadabad had opposed the move. Interestingly, the two of them had not been invited by the NPPA in their individual capacity but had represented a leading industry lobby—the Confederation of Indian Industry. Dr Hiremath confirmed to Outlook that he and the other doctor had been asked by CII and other industry chambers to make a representation to the DoP and NPPA not to add stents in the price-regulated list. On being prodded, Dr Hiremath admitted the trip was partly sponsored by industry chambers. Given the powerful doctors’ lobby, Aisola fears it may succeed in keeping stents out of the drug-pricing authority’s control.
India may take a leaf out of China’s response: in the last couple of years, China has heavily fined leading multinationals for corrupt practices to promote sales. The first step in this direction will be to set clear norms for angioplasty procedures. Dr Aggarwal says the IMA is in the process of “drafting guidelines for when, how and under what circumstances stents are to be deployed by doctors”. The second step will be to fix the prices of stents. In addition, independent studies need to be taken up on the quality of stents to help doctors and patients take informed decisions. Else, the arteries of the system will remain clogged by muck, lining the pockets of cardiologists and hospitals while emptying those of the patients—the final sufferers.