India Today · 16 Sept, 10:11

Economy, business and finance

Rs 11 product, Rs 325 MRP: Tukaram Mundhe flags huge hospital pricing gap

Tukaram Mundhe said hospital consumables can carry steep mark-ups long before reaching patients. He said weak monitoring leaves patients paying costs they cannot meaningfully assess.

Maharashtra Food and Drug Administration (FDA) chief Tukaram Mundhe has flagged huge margins on hospital products and medicines, saying patients could be paying hundreds or even thousands of per cent more than the trade price of products used during treatment, without knowing their actual cost.

In a social media post, Mundhe, under whom a massive FDA crackdown is underway in the state, said the most expensive part of a hospital bill may never touch the hospital at all.

"The most expensive part of a hospital bill may never touch the hospital at all. A patient admitted for care has no way of knowing whether the price on a medical consumable reflects its actual cost or a markup fixed long before it ever reached the ward. That gap in information is, at its core, a public health issue," the IAS officer wrote.

He cited findings from a survey of hospital consumables in Maharashtra, which found significant differences between the trade prices of certain products and their printed maximum retail prices (MRP), resulting in massive markups.

According to the figures shared by Mundhe, an IV infusion set with a trade price of Rs 11.05 carried an MRP of Rs 325, representing a markup of 2,841 per cent. A syringe procured at Rs 6.75 had an MRP of Rs 57.20, while a catheter bought for Rs 29.41 carried an MRP of Rs 310.

"These are not elective purchases," Mundhe said, pointing out that patients receiving medical care often cannot compare prices, seek alternatives or question the price printed on a medical product.

He said the MRP is often fixed upstream by manufacturers and distributors and can remain disconnected from the trade price, creating what he described as an “unexplained margin”.

“The result is a system where the party bearing the cost has the least information to evaluate it,” Mundhe, under whose remit drug pricing and medicine-related regulation fall as FDA Commissioner, said.

The officer also pointed to what he described as a structural regulatory gap in medical consumable pricing. He said scheduled medicines are subject to price ceilings under the Drugs (Prices Control) Order, 2013, while most medical devices and consumables are not subject to similar controls.

He said this leaves both their pricing and the information available to patients "almost entirely unmonitored".

Explaining the action taken, Mundhe said a review of the findings, along with clear guidelines on the permissible gap between the trade procurement price and the declared MRP, has been recommended to the Department of Pharmaceuticals and the National Pharmaceutical Pricing Authority (NPPA).

He said such measures could help address not only the pricing gap but also the information gap patients are left to bear alone.

Under Mundhe, the FDA has been conducting a widespread food safety crackdown across Maharashtra. Several hotels, restaurants, clubs and other facilities have been raided and issued notices, while some have been shut down over violations. The strict enforcement has earned him widespread applause from several quarters.