Hindustan Times · 16 Sept, 17:29

Economy, business and finance

Tukaram Mundhe seeks pricing review after survey shows 2,841% markup in hospital consumables

Flagging massive gaps in procurement prices and declared MRPs, Mundhe has written to the NPPA seeking a review of the survey's findings and appropriate action.

Maharashtra Food and Drug Administration (FDA) commissioner Tukaram Mundhe is reportedly seeking a national review of device pricing rules after a state government survey indicated markups as high as 2,841% in some cases, in hospital surgical consumables and medical devices.

Flagging the massive gaps in procurement prices and declared MRPs, Mundhe has written to the Department of Pharmaceuticals and the National Pharmaceutical Pricing Authority (NPPA), the country's drug pricing regulator. He sought a review of the survey's findings and appropriate action—including capping trade margins or bringing essential device categories under structured price monitoring, LiveMint reported.

"Our survey has revealed an extraordinary disparity between the trade procurement price and the printed maximum retail prices (MRP) of medical devices used in inpatient care, reaching as high as 2,841% in some cases, including IV sets, syringes, nebulizers and oxygen mask products," Mundhe was quoted as saying.

The Maharashtra officer has been in the news over his massive crackdown over food safety violations across the state, particularly after his department sent show-cause notices to Bollywood stars Shah Rukh Khan, Ajay Devgn and Tiger Shroff over their participating as brand endorsers for Vimal, allegedly a tobacco product.

“Patients cannot compare prices, seek alternatives, or question a number printed on a box while receiving care and the MRP itself is often fixed upstream by manufacturers and distributors, disconnected from the trade price by a wide, unexplained margin,” the IAS officer highlighted. “The result is a system where the party bearing the cost has the least information to evaluate it.”

He said review of the findings of the survey and clear guidelines on the ‘permissible gap’ between trade procurement price and declared MRP have been recommended to the Department of Pharmaceuticals and the NPPA, which he described as a step toward closing the pricing gap and information gap.

The NPPA is examining whether manufacturers and intermediary supply channels are adding huge markups between wholesale procurement prices and the prices charged to patients, Livemint quoted two officials as saying. It has also received similar representations from drug commissioners in Punjab, Rajasthan and Tamil Nadu, the officials were quoted as saying.

Medical device industry backs Mundhe's move

Following Mundhe's call for revision of device pricing rules, the medical device industry has backed the move.