Indian Private hospitals making profits of up to 1,737% on drugs, consumables and diagnostics: Study By.Dr.Mahboob Ali khan
The study shows that hospitals, and not drug makers, are the major beneficiaries of profits from drugs and consumables, According to the analysis, hospitals were pushing the industry to print higher MRPs to get bulk supply orders, This expenditure constitutes almost half the billed amount and is not part of the ‘estimate’ given by hospitals
The expenditure on drugs, devices, and diagnostics, constituting almost half the billed amount, is not part of the ‘estimate’ or ‘package’ (in case of implants) given by hospitals unlike procedures (about 11% of the bill) or room rent (12%), which are “the more visible components”, stated the NPPA. The NPPA’s analysis came after complaints of overcharging by families of some patients who died from dengue and other ailments. Patients in all cases had complained that the initial estimate of expenditure got inflated by three to four times, NPPA said. It said the hospitals involved had requested anonymity. Sources said the request was honoured since these practices are widely prevalent. The profit margins for the hospitals were highest on consumables, ranging from almost 350% to over 1,700%. On drugs that are not under price control, the margins ranged from about 160% to 1200%. Those on drugs under price control were between 115% and 360%. Pointing to the huge margins on non-scheduled devices like catheters, canulas and syringes, the NPPA release said these were a case of “clearly a case of unethical profiteering in a failed market system”.
