The Indian government slashed reimbursement rates for drug-eluting stents by more than 61.5%, down to about $460 from roughly $1,200, aiming to give a boost to its domestic stents industry at the expense of the multinational players.

It’s the 2nd rate cut since October 2011, according to the Business Standard. India cut the rate of reimbursement for U.S.-made stents from 65,000 rupees (about $1,200) to 25,000 rupees (~$461), which is now the standard rate for stents regardless of origin, according to the newspaper.

European-made DES saw their rates cut from 50,000 rupees (~$924), while stents made in India went from 40,000 rupees (~$739) to the new rate. Bare-metal stents will now be reimbursed at 12,000 rupees, or about $222.

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"For many years, the government of India focused on various pricing measures to reduce the cost of pharmaceuticals, with the anticipated result of greater public access to medicines. Over the last year and a half, we are starting to see this trend seep into the medical devices industry," an unidentified Abbott (NYSE:ABT) official told the Business Standard. "As industry, we want to work with the Indian government to make medical technologies more affordable and accessible. We are concerned that these ad hoc price decisions, made without due consultations with relevant stakeholders, would only serve to stifle the environment for investment and innovation." the official said.

Under the central health scheme, entitled government employees can avail of cashless diagnostics and treatment at hospitals, which send the patients’ bills directly to the government.

"The government feels the move would help reduce prices of stents in the market and benefit the domestic industry. Health ministry officials say the cut is aimed at making stents affordable and accessible for all. The government has also formed a review committee to assess the results of the new pricing structure," according to the newspaper.

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 Analysts’ ups and downs

• Abbott (NYSE:ABT): Sanford C. Berstein reaffirms “market perform” rating.
• Baxter (NYSE:BAX): Leerink Swann reiterates "outperform" rating, $78 price target.
• Becton Dickinson & Co. (NYSE:BDX): Jefferies Group initiates coverage with "buy" rating; Mizuho raises target price from $87 to $96, "neutral" rating; RBC Capital reiterates "sector perform" rating, $97 price target ; Zacks reaffirms "neutral" rating.
• Boston Scientific (NYSE:BSX): Zacks reiterates “neutral” rating, $8 price target.
• Covidien (NYSE:COV): Leerink Swann maintains $71 price target, "outperform" rating.
• HeartWare International (NSDQ:HTWR): Canaccord Genuity raises price target to $118 from $114; "buy" rating.
• Hologic (NSDQ:HOLX): ISI Group downgrades to "buy" from "strong buy" rating, $24 price target; Leerink Swann maintains "outperform" rating, lowers price target to $27 from $28.
• Insulet (NSDQ:PODD): Raymond James downgrades to "market perform" from "outperform" rating.
• Medtronic (NYSE:MDT): BMO Capital Markets reissues "outperform" rating, $52 price target.
• NxStage Medical (NSDQ:NXTM): Canaccord Genuity lowers price target from $18 to $16.50; Feltl & Co. increases price target from $11.50 to $12, "hold" rating.
• Smith & Nephew (FTSE:SN, NYSE:SNN): Bank of America sets "equal-weight" rating; Jefferies Group reaffirms "buy" rating, £8.50 ($13.23) price target; Morgan Stanley raises price target to £7.44 from £7.35.