FDA Finds Up To 2,800% Markup On Hospital Consumables, Seeks Price Control
Markups of up to 2,800 per cent on everyday medical consumables used in hospitals “need to be explained properly”, Maharashtra Food and Drug Administration (FDA) Commissioner Tukaram Mundhe has said. He has asked the National Pharmaceutical Pricing Authority (NPPA) to examine whether such items should be brought under price control.
Speaking to NDTV in an interview, Mundhe cited the example of intravenous (IV) sets. “If that product can be purchased by a hospital at, say, Rs 11 and the MRP is at Rs 325, they need an explanation for that,” he said. “The percentage difference, 2,800 per cent, is beyond comprehension on the face of it.”
The FDA compared the procurement prices paid by hospitals with the maximum retail prices (MRP) printed on the products. “What we found is that between the MRP which is printed, which is available in the hospital, and the hospital procurement price, there is a huge gap. And that gap is not explainable, at least to our minds,” Mundhe said.
Who retains the difference?
Asked whether the manufacturer, the distributor or the hospital was retaining the difference, Mundhe said the FDA had not examined that yet. “Who is sharing what is very difficult to determine at my level as of now, but it is not passing on to the consumer, that is for sure,” he said.
“Transparency needs to be there. The consumer needs to know, the regulator also needs to know, how it has been marked up at that level,” he argued.
Mundhe said the exercise began after complaints that hospitals were overcharging. It drew on data obtained from several hospitals in the Mumbai Metropolitan Region and beyond. “There was actually a complaint to me... What we did was basically to look at the data available with the various hospitals. It will be difficult to call it a survey, but it's actually data which we have procured from the hospitals themselves.”
The items in question include syringes, IV sets and nebulisers, which Mundhe described as essential to in-patient treatment. “Without that, treatment cannot take place,” he said.
What the FDA can and cannot do
Mundhe said the FDA has no power to act against hospitals, manufacturers or sellers in this matter as such. “If it is charging more than MRP, we can take action. We are authorised to do that. But if it is as per the MRP, we are not authorised to take any action, because it is as per the legal norms,” he said. “So that's why we have not taken any action against either the hospital or, for that matter, the manufacturer and seller.”
He said the matter now rests with the NPPA, and the FDA has made several recommendations, including bringing the consumables under the Drugs (Prices Control) Order (DPCO) issued under the Essential Commodities Act, 1955.
“All the stakeholders, whether it's a consumer, a hospital, or a manufacturer, along with the regulators, need to be taken into consideration... Whether it can be termed as systemic exploitation or not, the NPPA will be able to come out with that once the consultations are there,” he said.
He noted that essential medicines are price-regulated, while other products are not. “The DPCO is there, and every year a particular percentage of increase is allowed. That is a standard procedure. But non-essential medicines are not regulated by this, and that is where the issue comes in,” he said, arguing that hospital consumables should be treated as essential. “When you are admitted, these things are consumed on a daily basis by the hospitals for treatment purposes.”
Notices over pan masala advertisement
In the same interview, Mundhe said two of the three actors served show-cause notices over a Vimal Elaichi advertisement had replied. Shah Rukh Khan, Ajay Devgn and Tiger Shroff received the notices, which said the advertisements amounted to surrogate publicity for banned pan masala. Mundhe said adjudication and prosecution proceedings are being started against the actor who has not replied. He did not give a breakdown of which actors had responded.
