Margins on drugs as high as 1,192 percent in 4 private hospitals: Indian drug price regulator

New Delhi: Non-scheduled drugs and diagnostic services constituted major components of charges billed to patients in four private hospitals with margins as high as 1,192 percent, drug pricing regulator NPPA said.

For consumables such as a three-way stopcock, BI valve, GS-3040, the margins were even higher. The purchase price of the device for the hospital was Rs 5.77 and a 1,737 per cent margin on procurement price was charged, it added.

Elaborating on how patients were billed with high margins on medicines, the regulator said in case of Adrenor 2 ml injection with an MRP of Rs 189.95, the purchase price to the hospital was Rs 14.70 but was charged at Rs 5,318.60, inclusive of taxes, to patients.

The margin on procurement price of the drug used in emergency cases for treatment of potentially life-threatening low blood pressure was 1,192 percent.

Likewise, the NPPA said Todaycef 1 gm injection was billed to patients at Rs 860, whereas, the purchase price of the hospital was Rs 40.32 although the MRP was Rs 430. The margin on procurement price was 966 percent.

The drug price regulator did not disclose the names of the four private hospitals.

The NPPA said the pharmaceuticals industry in order to get bulk supply orders in a way is forced to print higher MRPs as per the market requirements.

It is amply clear that for claiming higher margins, doctors, hospitals preferred prescribing and dispensing non-scheduled branded medicines instead of scheduled medicines, it said.

This also indicates that the drug variants of scheduled medicines in the name of new drugs and fixed-dose combinations have become the preferred choice avoid price control by manufacturing and medical fraternity, the regulator said.

"This trend of migration from scheduled to non-scheduled category is reflected in the growth rate of NLEM and non-NLEM drugs in the year 2017 where the rate of growth of non-NLEM drugs is almost double the rate of NLEM drugs," NPPA said.