A drip set that costs Rs 11 to a hospital carries a printed price of Rs 325. A syringe bought for under Rs 7 is marked for sale at Rs 57. These figures were recently released by Tukaram Mundhe, Maharashtra’s Food and Drug Administration (FDA) Commissioner, who has given several such examples of massive profiteering during the sale of medical items by hospitals, and has asked the central government to limit such mark-ups. How does such inflation of margins impact the patient’s bill? A previous analysis of the bills of critical patients treated in private hospitals across Maharashtra, done as part of an audit process facilitated by Jan Arogya Abhiyan, gives striking answers. We compared what hospitals had charged patients with what the same hospitals paid for procuring the same medical items.

Not one of the 46 medicine brands we examined was charged within the limit of 10 per cent markup on their purchase price, which was fixed during the pandemic. For nearly half of the medicines, patients have been paying more than 150 per cent above the prices at which these had been obtained by the hospital. A paracetamol drip bought for about Rs 33 was being billed at Rs 408, over 12 times its actual cost. An antibiotic injection bought for about Rs 180 was being billed at Rs 950. The most common range of margins has been 200-400 per cent, meaning hospitals charge patients three to five times more their own procurement rates.

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The margins in the case of consumables can be even higher. A drip set bought for about Rs 12 may be typically billed at Rs 160, and sometimes even Rs 270. An oxygen mask costing about Rs 55 can be charged up to Rs 570. None of this is news to policymakers. In 2016, a Department of Pharmaceuticals committee chaired by Sudhansh Pant noted that high MRPs were “a tool to cheat the helpless consumer” and that “Fixing the MRP is, therefore, free for all and largely arbitrary in which the consumer is the net loser”. This national body recommended capping trade margins on all medicines and implants, price-controlled or not, between 35 per cent and 50 per cent depending on their price. Yet, 10 years later these recommendations gather dust, and patients continue to pay huge, unjustified margins (often 200 per cent or higher) on many medicines and consumables, which hugely contributes to medical impoverishment.

Three steps are urgently needed.

First, Maharashtra and other state government FDAs can direct every private hospital to mention during billing, for medicines and consumables above a set value, both the price the hospital has paid and the price it is charging. A Rs 12 purchase printed beside a Rs 160 charge would clearly tell consumers what is going on, supporting the logic for either the hospital to give a substantial discount, or for the patient to purchase from alternative sources whenever possible.

Second, the central government should expand statutory price regulation to all essential medicines and medical consumables (currently only 18 per cent of medicines are price controlled, that too in a manner that is often over-permissive). Such action would include appropriate amendments to the Drug Price Control Order, with key roles being played by the Department of Pharmaceuticals and NPPA (National Pharmaceutical Pricing Authority).

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Third, patients must claim a right they rarely use. Maharashtra’s FDA ordered in 2016, and again in 2022, that hospitals cannot force admitted patients to buy medicines only from the hospital’s pharmacy. The National Consumer Commission has called such compulsion an unfair trade practice, and this right is also mentioned in the National Patients’ Rights Charter. Patients and families can insist on buying medicines from any licensed chemist, where lower prices can be found. All hospitals must display this right of patients, and the FDA should enforce it, so that patients can go for more affordable alternatives. Until these much-needed steps are taken, for most patients admitted in private hospitals, MRP will continue to mean “Manipulated Raised Price”.

The writer is a public health expert and national co-convenor of Jan Swasthya Abhiyan