The National Pharmaceutical Pricing Authority has found that private hospitals are inflating medical bills by prescribing drugs which do not fall under price control and are overcharging patients for medical tests and consumable items such as gloves and syringes.
For instance, the body found that a hospital was billing a patient Rs 189.95 for a single injection that it purchased for Rs 13.64 – a profit of over 1000%. The report has made a list of all such drugs that hospitals have sold to patients at “higher profits”.
About 25% of a patient’s hospital bill is the cost of non-schedule formulations, or those not under price controls, which are priced exorbitantly. About 10% of the bill is a result of the charges for consumables and 15% is for diagnostic services.
The report said that drug manufacturers have been producing “new drugs” and “fixed drug combinations” in order to ignore price controls. These drugs, the report said have become a preferred choice of the manufacturing and medical fraternity. These companies also enjoy a 10% annual price hike on these so-called new drugs. NPPA officials said that in order to avoid coming under the Drug Price Control Order, manufacturers produce drug combinations which may not necessarily have any medical benefit, but these drugs are sold at a higher price and both hospitals and drug manufacturers enjoy huge margins.
The apex body for price control of drugs and medical devices investigated medical bills issued by several private hospitals in India after family of Adya Singh, 7, died of dengue at Fortis Hospital, Gurugram, complained against the hospital’s Rs 18-lakh bill. The family found that the hospital had charged them for 660 syringes and 2,700 gloves for a 15 day hospitalisation, according to a report in the Hindustan Times. Union Health Minister JP Nadda had instituted an inquiry following the complaint.
The government body found that the bed bath wet wipes, a consumable product, was purchased at Rs 33 by the hospital and billed it to the patient at Rs 350 – nearly a 950% profit. The challenge here is that the NPPA cannot even take any action against hospitals overcharging patients for consumable products as these items do not fall under the ambit of the Drug Price Control Order.
However, the NPPA report said that the profit margins in the non-scheduled devices used in the three cases (syringes, cannula and catheters) are exorbitant and clearly a case of unethical profiteering in a failed market system.
The drug pricing authority in its report said that charges for diagnostics at private hospitals were invariably found to be higher than diagnostics facilities provided by other independently run private centres.
Their report recommended a policy intervention to address such unethical practices of private hospitals, which are making healthcare inaccessible and unaffordable to many.