Hospitals making profits up to 1,700% on drugs, consumables

The National Pharmaceutical Pricing Authority (NPPA), in an investigation of treatment costs at private hospitals, has found these hospitals are making a profit of up to 1,700 per cent on drugs and consumables. For items like normal saline, the margin is 316 per cent.

An oxygen mask procured for ~26.41 has a maximum retail price of ~230. The margin on this is 771 per cent.

The drug price controller also noted hospitals were deliberately prescribing non-scheduled drugs over scheduled drugs. Scheduled drugs are those under a price cap.

The drug price controller also states hospitals and doctors are violating the system by prescribing fixed dose combinations and new drugs which are not under price control.

The cost of scheduled drugs in treatment accounted for 4.10 per cent and non- scheduled drugs accounted for 25.67 per cent. Fifteen per cent of the total treatment cost is on diagnostics.

The analysis, released on Tuesday, focused on how charges levied on diagnostics were much higher than those at independently-run diagnostics centres.

On disposables like syringes, the probe revealed that patients were not allowed to purchase these from outlets outside the hospital at discounted prices.

The expenditure on drugs and devices is 46 per cent and this expenditure is over and above the package cost in the case of implants.

The investigation was conducted by NPPA after patients complained of overcharging. The order issued by the drug price regulator said that consumers complained that the bill was thrice the estimated price.

Surgery cost is found to be only 0.39 per cent of the total.

Cost of other procedures is 11.42 per cent of total treatment cost.