Four Delhi hospitals overcharge for drugs by 1,000%: NPPA

A Delhi hospital billed Rs 189.95 for an injection it bought for Rs 13.64

HEALTH-MEDICINE/SHORTAGES It was found that scheduled drugs constitute only 4.10 per cent of the billing amounts | File

Four private hospitals in Delhi-NCR are inflating bills and overcharging patients as much as even 1,000 per cent, revealed the National Pharmaceutical Pricing Authority (NPPA). The report released by the apex body for price control of drugs and medical devices on Tuesday exposed how four private hospitals in the NCR are overcharging patients through inflated medical bills.

In the report, the NPPA made a list of all such drugs that hospitals have sold to patients at “higher profits”. For instance, it 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 1,000 per cent. Bed bath wet wipes, a consumable product, was purchased at Rs 33 by the hospital and billed to the patient at Rs 350—nearly 950 per cent profit. However, the NPPA cannot even take any action against these hospitals for overcharging patients for consumable products as these items do not fall under the ambit of the Drug Price Control Order.

Moreover, it was found that scheduled drugs or those that fall under price control or under the National List of Essential Medicines constitute only 4.10 per cent of the billing amounts. On the other hand, expensive, non-scheduled drugs that have no price caps or fall outside the purview of price control, make up for 25.67 per cent of the total billing amounts. "It is clear that for claiming higher margins, doctors-hospitals preferred prescribing and dispensing non-scheduled branded medicines instead of scheduled medicines, which anyway cover all essential medicines," the report stated.

While Fortis Memorial Research Institute in Gurugram was indirectly referred to in the report, the NPPA declined to reveal other hospitals, which provided billing information on condition of confidentiality.

The report comes in the wake of a complaint made by the family of a seven-year-old girl who died of dengue at Fortis hospital in Gurugram a few months back. The family was asked to pay a whopping Rs 16 lakh for 15-days of hospitalisation. When the matter was taken up by the NPPA based on an RTI application, it found, from the data submitted by Fortis, that the hospital marked up the prices of medicines and other consumables used, by even up to 1,700 per cent.

"In recent months, Delhi/NCR witnessed some unfortunate deaths because of dengue and other ailments in four reputed private hospitals. In each case, the NPPA got complaints of over pricing and inflated bills from relatives of deceased patients," the report stated. The NPPA, within its jurisdiction under Drug Prices Control Order, asked for details of billing from these hospitals and “analysed the same in great detail”. The data received, was tabulated under sections such as, 'scheduled formulations—essential medicines that are under price control', 'non-scheduled formulations—medicines that do not fall under price control', 'consumables', and 'medical devices'.

A number of other alarming revelations have been made by the NPPA, such as, "about 25 per cent of a patient’s hospital bill is the cost of non-schedule formulations, or those medicines that are not under price controls. About 10 per cent of the bill is a result of the charges for consumables and 15 per cent is for diagnostic services”.

"Institutional bulk purchase by private hospitals, which in most cases keep a pharmacy of their own, makes it easier for them to get very high profit margins and indulge in profiteering on drugs and devices even without the need to violate the MRPs, which is already enough inflated," the NPPA said. It further added that "The industry, in order to get bulk supply orders, is 'forced' to print higher MRPs as per the 'market requirements'. This is a clear case of market distortion where manufacturers after accounting for their profits print inflated MRPs to meet out the demands of a distorted trade channel and patients have to incur huge out of pocket expenditure in hospitalisation cases."

"The profit margins in the non-scheduled devices such as catheters, syringes and cannula are exorbitant and clearly a case of unethical profiteering in a failed market system. Most of the drugs, devices and disposables were used and sold by the hospitals from their own in-house pharmacies and the patients were given no choice or opportunity to procure these articles from outside the hospitals where prices are supposed to be lower in most cases because of some discounts," noted Anand Prakash, Deputy Director, NPPA, who undersigned the report.

The report recommended a policy intervention to address the unethical practices carried out by private hospitals, thereby, making healthcare not just unaffordable but also inaccessible to the common man.