BENGALURU: The Karnataka government has flagged a wide disparity between the landing/procurement cost and maximum retail price (MRP) of high-cost medicines, cancer drugs, antibiotics, medical devices and hospital consumables.
The state government has sought national action against exorbitant patient billing, alleging that hospitals procure these medicines at institutional discount prices but charge patients at or near the printed MRP.
In a letter dated September 23 to the Union health minister, Health and Family Welfare Minister U T Khader highlighted the issue of hospitals procuring medicines and consumables at heavily discounted institutional prices but charging patients at or near the printed MRP. The state said its investigations had identified MRPs ranging from 10 times to more than 52 times the procurement cost.
Among the products cited by the government, Gufipol had a landing cost of Rs 86 against an MRP of Rs 4,528, a 52.6-fold difference, while Guficycline-50 injection had a landing cost of Rs 160 against an MRP of Rs 7,110. Terlitis had a landing cost of Rs 118 and MRP of Rs 4,416, while Taxocare 120 mg had a landing cost of Rs 1,000 against an MRP of Rs 21,617. Other examples included Canmab 440 mg, Bevatas 400 mg injection and Cytax 100 mg.
Karnataka proposes mandatory ‘Cost-to-MRP’ disclosure in bills
Similar disparities were found in consumables. An adult nebuliser mask costing Rs 44.50 had an MRP of Rs 950, while an IV set costing Rs 14.75 had an MRP of Rs 295. A Polysafety PRO IV Cannula had a landing cost of Rs 33.21 against an MRP of Rs 548.
At a press conference here on Thursday, Khader said 253 drugs with extreme pricing anomalies had been identified during inspections and sought mandatory disclosure of landing cost and MRP on patient bills, expansion of price controls under the Drug Price Control Order (DPCO), regulation of trade margins on essential high-value medicines and consumables and an inter-ministerial expert group to study the issue.
The letter also sought amendments to the Drugs (Prices Control) Order, 2013, rationalisation of trade margins, mandatory cost-to-MRP transparency, expansion of the National List of Essential Medicines, treatment of back-end considerations as part of acquisition cost, and an audit and enforcement mechanism.
At present, the state said scheduled drugs under the DPCO have ceiling prices fixed by the NPPA with a 16% retailer margin, while non-scheduled drugs have no cap on retailer margins. Medical devices and consumables also have limited price control, while there is no specific regulation mandating hospitals to pass on institutional discounts to patients.
Following the minister’s direction, Food Safety and Drug Administration and Drugs Enforcement officers conducted another verification drive on September 25 and 26 at wholesale premises, hospitals and other establishments in Bengaluru and districts across Karnataka.
The preliminary exercise covered more than 768 consumables and 189 high-cost drugs. The department said substantial differences were observed between landing cost, MRP and actual sale price at different stages of the supply chain. The findings will be brought to the notice of the Central government.
The verification exercise will continue in phases, with the next phase covering anti-retroviral drugs, higher-generation and critical antibiotics, medical devices and hospital consumables having substantial financial implications for patients. The government has also called on hospitals and pharmaceutical establishments to maintain transparency in billing and provide patients and their families appropriate information on medicines, devices and consumables for which they are being charged.
