(Yicai) Aug. 20 -- Shares of MicroPort Endovascular MedTech Group, a unit of Chinese medical devices maker MicroPort, plunged after the country’s National Healthcare Security Administration questioned the significantly higher price of one of its coronary aortic stents.

MicroPort Endovascular [SHA: 688016] closed down almost 14 percent at CNY83.25 (USD11.65) a share in Shanghai today. The stock is down 36 percent since the end of last year.

MicroPort Endovascular should explain the price structure of the aortic stent, why it is more expensive than similar products, and what sales expenses cover, the NHSA said in an open letter to the Shanghai-based firm yesterday, after receiving complaints about the price. This is the first time that the NHSA has publicly queried a pharmaceutical and medical devices company.

The ex-factory price of MicroPort Endovascular’s Castor thoracic aorta covered stent and delivery system is about CNY50,000 (USD6,985), but dealers sell it to hospitals and other medical institutions for more than CNY120,000 (USD16,790), the NHSA found after a preliminary investigation.

“The administration monitors and manages market prices,” Liao Zangyi, associate professor at the China University of Political Science and Law, told Yicai. “It’s a means of transparent supervision to publicly inquire about the unreasonable price of MicroPort Endovascular, sending an important signal for other companies to regulate their prices.”

The NHSA also asked MicroPort Endovascular to disclose the development, production, and other expenses of the Castor stent, the sales volume and value, and actual profit on the product in the past five years, and why the difference between the ex-factory and end prices should be deemed reasonable and necessary.

The market for coronary aortic stents not included in the government’s centralized bulk-buying program for medicines and medical devices is uncompetitive, and manufacturers have a certain pricing advantage. MicroPort Endovascular has a 28 percent share of the Chinese market, according to a research report.

The NHSA went public with its pricing query to MicroPort Endovascular to eliminate price markups for consumable items, squeeze the middlemen, and break any possible grey transaction channels, Zhao Heng, founder of medical consultants Latitude Health, told Yicai.

MicroPort Endovascular expects to have logged a net profit of CNY420 million (USD58.8 million) and revenue of CNY800 million in the first half of the year, up 30 percent and 50 percent, respectively, from a year earlier.

Editor: Futura Costaglione