Bengaluru: Karnataka Food Safety and Drug Administration commissioner K Srinivas has sought urgent regulatory intervention over the pricing of medicines, medical devices and consumables supplied to hospitals at discounted institutional prices but billed to in-patients at the printed maximum retail price (MRP) or close to it.
In some cases, the difference between the landing cost and MRP is as high as 52 times. Among the cancer drugs listed, Taxocare 120 mg from Intas has a landing cost of Rs 1,000 and an MRP of Rs 21,617.6, a 2,061.8% difference or 21.6 times. Romy 250 mcg injection, also from Intas, has a landing cost of Rs 1,650 and an MRP of Rs 4,109, a 149% difference or 2.5 times.
The commissioner said a recurring pattern had been reported in hospital procurement and billing: a manufacturer or importer supplies an item to a hospital at a very low institutional price, while the pack carries a substantially higher retail MRP.
The letter says the practice “may be especially harmful” in these categories. “The patient, who is generally unable to obtain an immediate substitute during admission, bears the entire benefit of the manufacturer-hospital discount being retained within the supply chain,” the letter says. Srinivas described the issue as an “information-asymmetry and captive-patient problem”, saying patients generally do not know the institutional acquisition cost and do not have an effective choice at the point of use. Srinivas has sought an expert working group and amendments to the Drugs (Prices Control) Order, 2013, and asked that the matter be treated as “urgent” with a reasoned action taken report communicated.
In a letter to National Pharmaceutical Pricing Authority (NPPA) and Department of Pharmaceuticals, Srinivas has flagged critical-care medicines, oncology medicine, high-value injectables, implants and surgical supplies, besides diagnostic-linked consumables and disposable devices. The hospital then supplies it to an in-patient and charges the MRP or a nominal discount on it despite the lower acquisition price. The letter also proposes disclosure on hospital bills of the product details, MRP, net institutional acquisition cost, permitted service margin, taxes and final amount charged. It seeks quarterly electronic reporting, risk-based audits, a grievance channel and refunds with interest where overcharging is established.