BENGALURU: As the Karnataka government seeks central intervention over wide gaps between institutional procurement costs and the MRP of high-value medicines, pharmacists and drug trade representatives have called for tighter price regulation and greater transparency in hospital billing.
Karnataka’s Food Safety and Drug Administration found 253 drugs with extreme pricing gaps, with MRPs ranging from 10 to over 52 times their landing cost. The government has sought mandatory disclosure of landing cost and MRP on patient bills, expansion of price controls, and regulation of margins on high-value medicines and hospital consumables.
Institutional discounts are significant in the case of injectables and consumables, which hospitals procure in large quantities through tenders, said Ramesh Babu of the Bengaluru Pharma Association. While retail pharmacies generally receive limited trade margins, hospitals can negotiate substantially, he said.
Pharmacists should not be seen as the primary beneficiaries of the price difference, and the focus should instead be on the pricing structure adopted for institutional supplies, Babu said. He added that pharmacists were willing to reduce or even forgo margins on cancer medicines if manufacturers brought down the MRP.
Several high-cost and critical-care medicines do not ordinarily reach retail pharmacies as they are supplied through hospital dispensaries, said Raghunath Reddy, president of the Karnataka Chemists and Druggists Association (KCDA). As a result, patients may have little idea of the actual price, he said.
He also claimed that pharmaceutical companies may provide hospitals with additional rebates or incentives over and above the institutional discount, and called for greater scrutiny of hospital bills and procurement records.
The margins available to wholesalers and retailers are comparatively limited, said Ravindra Bhusnur, vice-president of the Karnataka Pharma Retailers & Distributors Organisation. Wholesalers generally receive around 8-10% and retailers around 16-20%, while the larger benefit of institutional discounts can remain with the institution where the medicine is sold, he said.
Many hospitals operate their own pharmacy counters, he added, stressing that the association has urged the government and the National Pharmaceutical Pricing Authority to bring down medicine prices.
The three representatives supported extending price controls to high-value medicines. Medicines already covered by the Drug Price Control Order are sold within government-fixed ceilings, and bringing more high-value and high-volume medicines under similar regulation would benefit patients, Bhusnur said.
