The layers of financial exploitation that the families of patients admitted in corporate and private hospitals across the country have to face during treatment have once again been exposed in government investigation reports and audit studies. According to official data collected by the Competition Commission of India (CCI) and the National Pharmaceutical Pricing Authority (NPPA), private hospitals charge patients in the garb of maximum retail price (MRP) on medical consumables, generic drugs and disposable medical equipment purchased at throwaway prices in bulk. Prices range from 10 times to 67 times (about 6,700%) more than cost. Are collecting. The helpless relatives of a patient suffering from serious illness, surgery or admitted in ICU are left with no option but to pay these bills. Now the Central Government, Union Health Ministry and Drug Price Regulator are in final preparation to tighten strict legal noose on this unbridled profiteering.
Investigation reports have revealed that hospitals earn the highest profits from medical consumables and generic products which are essentially used in dozens in the daily treatment of any patient. Manufacturing companies artificially print high MRPs on the packets of these products to attract hospitals, while these are made available to hospitals at Bulk Institutional Discount:
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Disposable Syringes and Needles: The 5ml or 10ml syringe which is available only in the hospital ₹1.80 to ₹3.50 purchased from a wholesale supplier in the patient’s final discharge bill for ₹35 to ₹75 are recovered up to.
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IV Cannula and Drip Sets: The purchase cost is only ₹8 to ₹15 per unit, but patients are charged ₹120 to ₹250, which is 15 to 20 times more than the actual purchase price.
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Surgical Gloves and PPE Gown: For a pair of sterile latex gloves available for ₹9 to ₹12, the bill for ₹80 to ₹150 is added to the patient’s account.
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ICU Medicines and Antibiotics: In cancer chemotherapy, high-end antibiotics and anesthesia injections, straight margins ranging from 500% to 1,200% have been recorded between the purchase price and MRP.
Comparative chart of purchase price of medicines and medical equipment versus recovery from the patient.
| Medical Items/Materials | Average Purchase Price of Hospital (Bulk Procurement) | Price charged to the patient (MRP / Bill) | Profit Margin (Markup Factor) |
| Disposable Syringe (5ml/10ml) | ₹2.20 – ₹3.50 | ₹45.00 – ₹75.00 | from 15x to 25x |
| IV Cannula | ₹9.00 – ₹14.00 | ₹140.00 – ₹220.00 | from 12x to 18x |
| Oxygen Mask/Nebulizer Kit | ₹18.00 – ₹25.00 | ₹250.00 – ₹450.00 | from 14x to 20x |
| surgical cotton and gauze roll | ₹12.00 – ₹18.00 | ₹120.00 – ₹200.00 | up to 10x |
| Catheter (Foley Catheter) | ₹28.00 – ₹40.00 | ₹350.00 – ₹650.00 | from 12x to 16x |
| Critical Care Generic Injection | ₹45.00 – ₹80.00 | ₹1,800.00 – ₹4,500.00 | from 40x to 67x |
A systematic system is implemented by hospitals to secure these huge margins, which directly violates the rights of patients:
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Ban on purchasing medicines from outside: In most of the big private hospitals, attendants of the patients admitted are not allowed to purchase medicines and surgical items from any Jan Aushadhi Kendra or retail chemist shop located outside the hospital premises.
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Branded Prescriptions and Codes: Instead of writing generic salt names on the prescription, doctors write specific brands or in-house codes that are available only at the internal pharmacy of that hospital.
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Indirect pressure to stop treatment: If the attendants try to bring cheap medicines from outside, the hospital management refuses to accept the goods citing the risk of infection or the quality policy of the hospital.
To stop this organized medical exploitation, Union Ministry of Chemicals & Fertilizers, NPPA and NITI Aayog are working on a joint regulatory framework, which may be notified soon:
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Margin Capping on Price to Distributor (PTD): Government on all non-scheduled medical devices and consumables Trade Margin Rationalization (TMR) Preparing to implement. Under this, hospitals will not be able to add a maximum profit of more than 30% to 50% on the price at which the manufacturing company sells the goods to the distributor or hospital (PTD).
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Mandatory availability of Jan Aushadhi Kendras: Consideration is being made to make it mandatory to allot space for Pradhan Mantri Bharatiya Jan Aushadhi Kendra (PMBJK) and AMRIT pharmacies in the premises of large hospitals or at their entrance.
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It is mandatory to write generic salt: Under the guidelines of the National Medical Commission (NMC), if a doctor does not write a generic name on the prescription or forces the doctor to purchase only from a specific pharmacy, then there is a provision for disciplinary action like license suspension against him.
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Transparent Item-Wise Audit: It will be mandatory for hospitals to provide detailed batch number, manufacturer name and actual bill details of medicines and consumables along with the discharge summary.
Along with regulatory strictness, common citizens also need to be alert about their legal rights:
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Ask generic salt of medicines: Ask the salt name (original chemical component) of expensive medicines prescribed by the doctor and clearly tell the hospital management to provide lowest cost generic alternatives to the medicines.
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Grievance Redressal Mechanism (Pharma Sahi Daam): If a hospital charges more than the ceiling price on prescribed National Essential Medicines List (NLEM) medicines, an online complaint along with a copy of the bill can be lodged directly on NPPA’s ‘Pharma Jan Samadhan’ portal or ‘Pharma Sahi Daam’ mobile app.
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Help of Consumer Forum: Under the Consumer Protection Act (CPA), no patient can be held hostage to unfair trade practices and forced to purchase medicines only from the hospital pharmacy. In such cases, consumer courts are imposing huge fines and damages on hospitals.