Monday, 1 December 2014

$100 Stents from India in the Offing

Since the USFDA approved cardiac stents in 1994, there has been tremendous growth in their use, to where 700,000 are implanted in patients annually in the U.S. alone.  Manufacturers' sales of stents reached $5.5 billion in 2012.

In the U.S. about 50% of stent implants are for acute conditions, such as unstable angina, or chest pain caused by the buildup of plaque in the arteries surrounding the heart. The other half are for elective-use patients in stable condition. This video from the Mayo Clinic illustrates Percutaneous Coronary Intervention (PCI), the procedure for which the large majority of stents are used:

The price of stents has followed the broad pattern of decline typical among innovation life cycles. Bare Metal Stents (BMSs) were first priced wholesale around $1,600 in the early 90s, but today the average cost is around $700 each. Drug-eluting Stents (DESs) were a new model introduced in the early 2000s that have helped marginally reduce potentially fatal angioplasty complications, such as blood clotting. These were originally priced around $3,000, and now cost about $1,500 each. According to Bloomberg, "Hospitals receive an average payment of about $25,000 per stent case from private insurers . . . [and] Doctors who implant stents earn a separate fee that averages about $1,000." The stent cost, then, only comprises ~5% of the total price of implantation, not to mention the ongoing costs for the patient, including blood-thinning medications, which are prescribed as a matter of course to mitigate the risk of restenosis.

Until 2001, India imported nearly 100% of stents used, although there were successful early innovation efforts at lowering the cost of stents through indigenous innovation. A network of doctors and engineers at Care Hospitals, Mediciti Hospitals, and the Society for Biomedical Technology pioneered a low-cost coil stent patented as the Kalam-Raju in 1995, crashing the prices of imported stents by several factors, and remained about 50% less expensive, costing around $250. One of their main reasons for creating a low cost stent was that the reason for the "very low number of cardiac procedures carried out in India is poor affordability arising from the high cost of imported consumables." Depending on the report, there were about 2,000 Kalam-Raju stents implanted before mesh designs replaced the coil stents.

Kalam-Raju Coil Stent, 1995
Indian innovators have generally trailed the major OEMs in stent innovations, so the design shift from mesh to scaffolding, and the biochemical shift to drug-eluting stents have not been kind to the market for indigenous stents in India. There remains a general mistrust of locally manufactured products among large, urban hospital systems, who remain the largest buyers of stents. These developments have maintained a high import price for foreign stents in India, and some reports show patients paying up to three times the import price for stents! Needless to say, the penetration of angioplasty in the Indian market remains tragically low. Of course, the high price of consumables is not the only reason for this. Another is the very low number of cardiologists in the country.

Nevertheless, it's clear that any solution to providing stents when and where they're needed in India will require low cost, high quality stents as part of the solution. Efforts to create affordable indigenous stents have continued in India, such as Relisys' Corel+C in 2007, a collaboration between Dr. Balram Bhargava, Relisys, and Germany's CINVENTION to create a non-polymer-based DES that was both safer and 50% the cost of imported DESs. Ultra efficient cardiac care centers like Narayana continue to ensure foothold markets for indigenous stents that are 'good enough.' While some may scoff at the use of 'good enough' applied to Class 3 implantable devices where quality is at a premium, we should all keep in mind that some device features are luxuries, and that having the basic version of a device that's almost as good, but that costs multiple factors less is far more valuable to a patient whose alternative is nothing at all. And the benefits of the 'best-performing' stents are quite marginal. A recent study found the rates of late stent Thrombosis to vary only marginally from one stent type to another as follows:
  • BMS stents: 1.5% 
  • Old generation DES: 1.1% 
  • New generation DES: .9%
Insured patients in the U.S. will pick the new generation DES every time for a .2% risk reduction, but the potential for disruptive innovation lives on in Indian healthcare, where only some 25% of the population even has access to some form of insurance, so that patients often haggle extensively with providers on costs for which they pay out of pocket. 

The implicit question of each post is always, 'could this device disruptively transfer into the U.S. healthcare market?' Let's compare the prices first: 
$200 is a already a low price for a stent, but the Indian OEMs give a further 25% discount to hospitals who buy directly from them, bringing the cost to $150. Furthermore, the Indian Council of Medical Research is currently conducting a study comparing the quality of imported vs. indigenous stents made by companies like Opto Circuits India, Sahajanand, Translumina Therapeutics, Vascular Concepts, and Vasmed Technologies. If they find similar levels of clinical outcomes, this would help drive domestic uptake, and further decrease the price through economies of scale, perhaps to around $100 each. 

Hospitals using fee-for-service reimbursement may desire to purchase lower cost stents, where 'cathlabs' have become valuable sources of profit at fixed reimbursement rates. Just switching to a $500 Indian DES from a $1,500 U.S. DES would save a hospital performing 2,000 implants per year $2,000,000. In time, payers will reduce reimbursement rates as low-cost stents contribute to low-cost implant procedures, further enabled through remote surgery trends and other efficiency gains. In the meantime, it may already be the case that ACOs and other specialized surgery centers in the U.S. who are incentivized to reduce costs at or above average outcomes would be interested in offering patients a choice between a $100 BMS with a 1.5% chance of Thrombosis, or a DES for $1,500 with a .9% chance of Thrombosis.

Starter Question for Comments: 
  • What's stopping low cost stents from being adopted in the U.S. today? 


  1. Quick correction: A Cardiologist brought to my attention that DESs' main benefit is not to reduce the risk of thrombosis, but rather restenosis. According to this article from the Mayo Clinic, BMSs reduce the risk for restenosis from 30% to 20%, while DESs reduce the risk further to 10%:

    That being said, restenosis is only one risk associated with stenting, and studies have found no significant difference in mortality rates between BMSs and DESs: . Therefore, the broader possibility of allowing patients to choose between substantial cost savings or very marginal risk reduction still stands.

  2. Translumina Therapeutics of India brought a new DES to market in 2013 that halved the price of DESs from foreign companies:

  3. "The average price for a drug-eluting stent is $1,340, said Amanda McShea, a manager for ECRI's PriceGuide service."