Karnataka Flags Wide Gap Between Landing Cost and MRP of High-Cost Medicines

The state's Food Safety and Drug Administration (FDA) identified the pricing disparities during inspections of hospitals treating cancer patients and other establishments. The department has brought the findings to the attention of the Union Ministry of Health and Family Welfare and the National Pharmaceutical Pricing Authority (NPPA), seeking measures to address excessive billing of patients.

According to the department, some pharmaceutical products are supplied to hospitals at significantly discounted institutional rates, while patients are subsequently charged prices at or close to the printed MRP. The inspections identified 253 drugs showing substantial differences between procurement costs and MRPs.

Among the examples cited by the department was Gufipol, supplied by Criticare, which had a reported landing cost of Rs 86 against an MRP of Rs 4,528, a difference of around 52.6 times. Guficycline-50 injection had a landing cost of Rs 160 and an MRP of Rs 7,110, representing a 44.4-fold gap.

Terlitis was procured at Rs 118 compared with an MRP of Rs 4,416, while Taxocare 120 mg had a procurement cost of Rs 1,000 against an MRP of Rs 21,617.

Other products highlighted in the inspections included Canmab 440 mg, with a landing cost of Rs 6,600 and MRP of Rs 57,457, and Bevatas 400 mg injection, which was procured for Rs 5,850 compared with an MRP of Rs 62,690.

Similar differences were found in hospital consumables. An adult nebuliser mask with a reported landing cost of Rs 44.50 carried an MRP of Rs 950, while an IV set procured at Rs 14.75 had an MRP of Rs 295.

Health and Family Welfare Minister U.T. Khader wrote to the Union Health Minister on September 23, seeking intervention to address what the state described as excessive patient billing involving medicines, medical devices and consumables purchased by hospitals at institutional prices.

The Karnataka government has proposed that patient bills should mandatorily disclose both the landing cost and MRP of medicines and medical products. It has also sought wider coverage of price-controlled medicines under the Drug Price Control Order, regulation of trade margins on essential high-value medicines and consumables, and the formation of an inter-ministerial expert group to examine the issue.

Other proposals include amendments to the Drugs (Prices Control) Order, 2013, rationalisation of trade margins, greater transparency between procurement costs and MRPs, expansion of the National List of Essential Medicines and the creation of stronger audit and enforcement mechanisms.

The FDA and Drugs Enforcement Officers conducted another verification drive on September 25 and 26 at wholesale establishments, hospitals and other facilities in Bengaluru and districts across Karnataka.

The latest inspections covered more than 768 consumable items and 189 high-cost drugs. The findings are expected to be submitted to the Central Government.

The department said the verification exercise would continue in phases, with the next phase focusing on anti-retroviral medicines, critical and newer-generation antibiotics, medical devices and hospital consumables that can have significant financial implications for patients.

The Karnataka government said it would continue working to improve transparency in healthcare billing and reduce avoidable financial burdens on patients.