Centre flags data gap, regulatory hurdles in curbing hospital mark-ups

NEW DELHI: Amid SC’s scrutiny of hospitals charging patients steep mark-ups on medicines and consumables, govt officials have flagged gaps in data and regulatory hurdles in extending price controls to hospital supplies, saying the Centre first needs to establish the extent of margins before considering intervention.

The Union govt has told the SC in its affidavit that margins on hospital consumables can range from 100% to 1,000% or more, highlighting concerns over the high mark-ups patients often face on supplies used during treatment.

However, a senior official told TOI that the govt does not have the data needed to assess margins across hospital supplies and determine whether wider controls are warranted.“We first need to get the data and then examine whether there is a margin and a need to control it,” another senior official said, explaining that the purchase price of medicines and consumables would need to be compared with what hospitals charge patients before deciding on any intervention.

Centre fixes ceiling prices for scheduled medicines and has limited annual price increases for non-scheduled drugs up to 10%.

It has decided to cap trade margins on certain anti-cancer medicines at 30% of MRP.

Extending similar controls to other medicines and hospital consumables, officials said, would require analysis and consultation.

A health ministry official, however, raised doubts about how far the govt could regulate hospital billing, saying hospitals, with health being a state subject and governed by the Clinical Establishments Act or other laws enacted by state govts..

The Centre’s role, the official said, is largely confined to drug-price regulation through the National Pharmaceutical Pricing Authority.

Regulating individual components of hospital bills would be difficult, the official said, pointing out that hospitals charge package rates without providing detailed itemised bills.

Restricting charges on consumables could lead profitconscious hospitals to raise other fees, including surgeons’ charges, the official argued.

The official also disputed the blanket use of the term “overcharging” when hospitals bill patients at the MRP, saying there is no general legal requirement to offer discounts below the printed price.

They cited delayed reimbursements from insurance firms and govt health schemes as financial pressures on hospitals that would need to be factored in while deciding any broader intervention.