Is a price war brewing in the stent business?
The developing world is lining up to disrupt the coronary revascularization device industry with competitive, home-grown stents and balloons reaching into Europe and toward the U.S.
China and India are expected to be the two largest international stent markets by 2020. Indian manufacturers are enjoying an increasing share of their home stent market (from 57% in 2016 to 61% in 2017), whereas Chinese stents already make up around 70% of the domestic market.
With rising sales at home (China had percutaneous coronary intervention hospitalizations grow 21-fold
from under 10,000 in 2001 to more than 200,000 in 2011, for example), Indian and Chinese companies are well poised to fund research with an eye for fulfilling the FDA approval requirements for their cheaper stents.
"They have substantial revenue coming from India, China, and Europe so they can afford to go in the future through the effort and challenge of an IDE [FDA Investigational Device Exemption study]," said Patrick Serruys, MD, PhD, of Imperial College London, in an interview. "These two giants in intellectual capacity and technology want to expand the market to the Western countries, and Europe is kind of a springboard for the U.S. once they've got their CE Mark."
One device on the European market for 5 years already is the Supraflex from SMT of India. At the Transcatheter Cardiovascular Therapeutics meeting this year in San Diego, Serruys and colleagues revealed that the sirolimus-eluting ultrathin stent was non-inferior to the gold-standard Xience stent from California's Abbott Vascular in the TALENT trial.
"All the clinical trials so far are benchmarking against U.S. market leaders and what we're seeing is that the safety and efficacy of new devices are really well-matched. Ultimately, what it will come down to is probably pricing and deliverability, the ability to deliver the stents," Alexandra Lansky, MD, of Yale School of Medicine, told MedPage Today.
Importance of Price
Already price has impacted where technology goes and doesn't go. "Some technology doesn't get into Germany," for example, Serruys said, because companies try to put a premium on their product. "They will claim 'we have something superior so you have to pay more.'"
Going cheap gave Indian companies a home advantage when India capped drug-eluting stent (DES) prices at about $400, whereas some Western manufacturers pulled their devices out of that market. Chinese-made stents, similarly, are half the price of imported ones.
If these devices entered the U.S. market, even a small price cut would go a long way, Serruys suggested.
For example, a consortium in Germany buys "100,000 stents in one shot. So if you have a discount of €1, immediately it pays off," he said.
Yet the globalization goes both ways, with U.S. companies also trying to go into the Chinese market. Venus Medical of China and U.S.-based Keystone Heart recently merged, and more such mergers may be expected, Lansky said. "This leverages this Chinese market for the U.S.-based company; and for the Chinese-based company coming now to the U.S., they will have infrastructure in both geographies."
However, even without a price war from Indian- and Chinese-made competition, DES prices have been slumping downwards for years. In the U.S., the average DES price fell from $2,500 in 2006 to $1,500 in 2014, a recent Health Affairs study
Even so, that's about $1,000 more than what was paid in Germany at both timepoints for identical models.
"It is commonly accepted that prices are confidential, which allows manufacturers to increase profits by charging different prices to different buyers, depending on their bargaining power. Manufacturers can also wield significant market power," the study authors wrote.
"The need for investments in research and development and in obtaining regulatory approval and reimbursement, as well as brand loyalty of physicians, create entry barriers for new competitors. While entrepreneurial firms may be the sources of innovation, larger firms often acquire first-generation technologies and develop them further, leading to market concentration with few large competitors," the group noted.
It's difficult to predict who will rise and who will fall with the introduction of Indian and Chinese stents. Ultimately, it doesn't matter if where the manufacturer is based, Serruys suggested.
"Their future is related to to their product, their engineering of the product, the organization of the company itself, and finally the people directing the company," he said. "There are some captains of industry that are incredible and when they go away, the company spirals down."
Room for Innovation
Price is not the only draw of Chinese and Indian stent-makers. They, too, are innovating to improve on the already-excellent outcomes seen with current-generation DES.
"In general, the Far East technology has already embraced the biodegradable coating, so they're not necessarily using permanent coating. Some of them have a drug release which is shorter than 28 days," Serruys said.
MicroPort's Firehawk DES is one such technology from China. The sirolimus-eluting stent with a biodegradable polymer matched Xience in target lesion failure at 12 months and late lumen loss at 13 months in the TARGET All Comers study recently published in The Lancet.
From India, there are SMT's Supraflex and the MicroSphere coated balloon from Envision Scientific/Concept Medical. The latter is able to elute sirolimus because of its lipid-membrane design that Serruys called an "original technology."
And to compete in the trend toward ever thinner strut stents, Indian manufacturer Merill Life is making a DES that is only 50 μm thick, noted Serruys. "Everybody goes to the ultrathin struts."
An End to the Stent Wars?
But how much room for improvement remains is unclear. Device makers now seldom target superiority on patient outcomes in head-to-head trials, Serruys pointed out.
"What I don't like are these trials called non-inferiority in events like TLR [target lesion revascularization] and MACE [major adverse cardiovascular events] and TVF [target vessel failure]. Because slowly but surely we are reaching the bottom of event rule," he said. "It used to be 8% events, then 6%, now it's close to 5% and we're starting to see below the level of 4%. It's somewhat ridiculous to keep working on non-inferiority."
"For me as a physician and clinician, the key point is the persistence of angina pectoris in one-fifth of patients. That's what we should work on. That's why the ABSORB IV trialwas very important. Gregg Stone showed in double-blind approach that one out of five patients still have angina after the treatment. And it's even worse in the female patients. That's the new target," he emphasized.
"If everyone is working toward non-inferiority, and everyone is a 'me too,' the manufacturing cost becomes a big issue. The cost of manufacturing depends on the work required ... The second point is where is the manpower? If the manpower is in the state of Iowa or in Macau, that plays a major role," Serruys said.
So will manufacturers that benefit from cheaper manpower ever see their stents sold for a low price in the U.S.?
"It will happen. It will take time. I'm impressed by the good organization of these Indian and Chinese companies. They really go for it with all the resources that you need for good investigation," Serruys said, noting his experience from working at Cardialysis, a clinical research organization in Rotterdam that just celebrated 35 years working with more than 100 companies.
Lansky agreed: "My message is that, yes, we're seeing the emergence of devices coming out of India and China... I'm seeing companies really step up in terms of quality and rigor of clinical research. We're seeing the results, and the results are very solid."
Read the original article on Medpage Today: East Meets West: Chinese, Indian Stents Aim for Global Market