NEW DELHI: The Modi government’s efforts to cap the price of cardiac stents exposed the nexus between stent companies and hospitals in looting the public by overcharging them.
But no action has been taken against either companies or hospitals. None of them paid penalties or faced charges for colluding to cheat the public. Contrast this with the US government which has, over the years, fined the three biggest stent companies, Abbott, Medtronic and Boston Scientific, millions of dollars for charges ranging from bribing doctors to use their products to hiding defects in their device.
Yet, on the eve of PM Modi’s visit to the US, lawmakers in that country supported these companies by urging India to reconsider its decision to cap stent prices.
This is despite the fact that before the price cap, India was paying among the highest prices for stents globally, even higher than in the US. Not only have stent companies been forced to cough up millions, the US department of justice (DoJ) also cracked down on more than 500 hospitals and reached settlements amounting to about $300 million on charges of inappropriate implantation of cardioverter defibrillators and stents.
Several cardiologists too have been fined and jailed for their role in such improper treatment.
According to the US DoJ website, the department has recovered more than $16.4 billion in cases involving fraud against federal health care programmes since January 2009. The US attorney stated that physicians should be making decisions on medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business.
In the US, the price of a drug eluting stent (DES) ranges from Rs 62,000 ($950) to Rs 78,000 ($1,200). Before price control, hospitals in India were charging almost twice as much with prices typically ranging from Rs 65,000 to Rs 1.7 lakh. In the case of bioabsorbable stents, the US paid about $100 to $200 more than the price of the most expensive DES, or roughly $1,200—$1,500. In India, patients were charged Rs 1.9 lakh (over $2,900) for Abbot’s bioabsorbable stent.
By printing highly inflated maximum retail prices, stent companies in India helped hospitals make huge margins by charging double or even triple the cost at which they procured stents. The hospitals in turn turned a blind eye to cardiologists known for very high rates of stenting as it brought in huge revenue for them. Some hospitals in India have been likened to stenting factories, implanting several hundred stents each month. There has been no medical audit of angioplasties and other cardiac procedures done by these hospitals despite senior cardiologists seeking such an audit of the 900-plus cath labs and suggesting that well over a quarter of the stenting done in India could be unnecessary.
The huge recoveries in the US have been made possible chiefly through the False Claims Act, which permits recovery of funds from anyone who knowingly presents or causes to be presented a fraudulent claim for payment to the government. Other laws used include the Stark law, which prohibits the practice of physicians referring patients to medical facilities in which they have a pecuniary interest. The Anti-kickback Statute prohibits anyone from offering, paying, soliciting, or receiving remuneration in cash or kind to induce or reward referrals or generate business for any entity participating in a federal programme.
The penalties under each of these laws can be crippling and in extreme cases those responsible could face criminal charges. Using these three laws, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a special team constituted by the US government in 2009, has recovered billions of dollars and booked offenders. However, in India, the government has not cracked down or recovered the money on behalf of the people and nor have any laws been enacted to deal with the situation.