Artery stenting in chaos

Despite an increase in the markup of maximum retail prices (MRPs) of essential heart surgery devices in recent times by the drug administration of the country, importers claim that inappropriate price evaluation process hardly leaves any space for them to lower the prices.

According to them, they are incurring losses in some cases.

The Directorate General of Drug Administration increased the prices in March in the wake of demands from importers. But importers said the authorities concerned didn’t take cognizance of many taxes and charges while evaluating the prices.

The prices of essential heart surgery devices such as stents, pacemakers, valves, oxygenator circuits and catheters were increased citing dollar price hike. Depending on importers and brands, the prices of stents, on average, went up by 30 per cent while valves by more than 80 per cent, oxygenator circuits by almost 100 per cent and pacemakers by about 60 per cent overnight.

Market insiders said that a heart stent now costs Tk80,000 which was Tk62,000, a valve Tk95,000 which was Tk52,000, an oxygenator circuit Tk50,000 which was Tk25,000 while a single-chamber pacemaker costs Tk145,000 which was Tk90,000 and a double-chamber one Tk240,000 which was Tk157,000.

The country has the demand for some 2,500-3,500 stents per month and some 300 pacemakers per year for treatment of different heart diseases. Bangladesh fully depends on import of heart devices as no such product is manufactured in the country.

Physicians say that due to the price hike of heart devices, many poor patients go back home without getting treatment.

As many as 30 companies, including Vastech Ltd, Advance Meditech, Cardinal Health Care, HeartBeat and Cardiac Care, import heart devices from the USA, Singapore, India and some European countries. Products from Boston Scientific, Abbot and Medtronic are frequently used in Bangladesh.

Importers said that a well-organised tax system can help cut stent prices.

“Importers are largely blamed for the price hike of stents (heart ring) but they never talked about the taxes imposed on them. This is not price hike rather price adjustment,” said Medical Device Importers Association of Bangladesh (MDIAB) office secretary Md Mahfuzur Rahman.

Md Tanvir Chowdhury, Business Unit Head (IC and PI) of Vastech, alleged that the prices in general have been increased but it won’t be much if compared with dollar price hike and increase of taxes.

In Bangladesh, three categories of stent are used--lower budget, middle quality and upper grade stent, he said.

He added that 90 per cent of the patients use lower budget stents which cost Tk70,000- Tk80,000. Only 2per cent patients have a middle quality stent which could cost TK100,000-Tk115,000. And some 7-8 per cent use upper grade stent that would cost Tk150,000-over TK200,000. These devices are mostly used in United and Apollo hospitals.

So, the prices of the stents did not go up much in comparison to the price rise in other products, he said.

Tax burden

While talking about the imposed tax, Roknuzzaman Khan Choudhury, a partner of Cardial HealthCare, said it seems that importers just import stents and sell them. “But this is not the fact.”

“While importing devices, we have to pay LC charge, Advance Tax (AT), Tax Deducted at Source (TDS), Vat Deducted at Source (VDS) and also service charges to the hospitals (retailers).”

According to MDIAB, for a device priced at US$100, importers need to provide 2 per cent insurance charge, 1 per cent LC commission, customs duty and Vat but they need to pay 5 per cent Advance Tax that was never documented in the markup document for evaluating pricing, again Vat have to be paid under VDS.

Again they have to pay 3 per cent foreign bank charge, 4 per cent clearing charge and after importing the devices, distributors’ commission (5.5 per cent), retailers’ commission (11.20) are added to the cost.

“So, the total retail price stands at US$142.6235 or the markup is 1.4263,” said Anowar Hossain, general secretary of the device importers association.

Mustafizur Rahman, marketing manager of Life Line, said that although every patent pays the price for the devices soon after the operation, hospitals (who generally act as retailer and take up to 11 per cent charges) pay the money after deducting TDS and VDS.

Importers or distributors have to pay additional taxes depending on total sales. If they pay monthly, the tax rate could be lower, he added.

Importers said that when hospitals pay for the stents, they deduct TDS (3.5-7 per cent) and VDS (7 per cent) from it.

“But this is never documented in the markup process by the drug administration which is eating up our profit and putting us in a loss-making state,” said Anowar Hossain.

Progress in line

Roknuzzaman of Cardial HealthCare said that if the taxes could be decreased and service charges could be revoked, the markup would come down significantly and the prices can go down without harming the businesses.

“If the authorities are pressuring us more and could not improve the business environment, many will be discouraged to import devices and it will ultimately affect the patients,” he said, adding that there is a scarcity of raw materials in Europe and Singapore.

However, a letter has been sent to the Drug Administration and National Board of Revenue (NBR) on March 28 asking for the readjustment of the prices as they are suffering Tk184 losses for the products valued US$100.

DGDA sat on a meeting on March 30 to introduce the process of reducing the prices of stents and other sophisticated cardiac devices.

Shamim Al Mamun, owner of The Heart Beat, said that no concrete decision has been made in the meeting, but a process has started to establish a well-organised stenting treatment system comprehensively from importing to planting the devices.

The authorities have also assured the importers that they will communicate with the NBR and other government agencies concerned through the ministries so that the lower and proper retail prices could be ensured, he added.