Maharashtra FDA Flags 2,800% Markup on Hospital Consumables, Urges NPPA Review

Maharashtra Food and Drug Administration Commissioner Tukaram Mundhe has raised concerns over steep markups on everyday medical consumables used in hospitals, describing a gap of as much as 2,800 per cent between what hospitals pay and the maximum retail price printed on the product as something that "needs to be explained properly".

Speaking about intravenous sets, Mundhe said a product a hospital can buy for about Rs 11 carries an MRP of Rs 325. The percentage difference, he said, is beyond comprehension on the face of it.

The findings came from comparing procurement prices paid by hospitals with the MRPs printed on the items, drawing on data gathered from several hospitals in the Mumbai Metropolitan Region and beyond. Mundhe said the exercise followed a complaint about overcharging, and while it may be difficult to call it a survey, the data was procured from the hospitals themselves.

The items under scrutiny include syringes, IV sets and nebulisers, which Mundhe described as essential to in-patient treatment, adding that without them treatment cannot take place.

Asked who was retaining the difference — manufacturer, distributor or hospital — Mundhe said the FDA had not yet examined that question. He said it was very difficult to determine at his level who was sharing what, but asserted that the gap is not passing on to the consumer. Transparency is needed, he argued, so that both the consumer and the regulator know how the markup was arrived at.

Mundhe also set out the limits of his department's powers. The FDA can act if a product is charged above its MRP, but if the price is at or below the printed MRP, the department is not authorised to take action because it conforms to legal norms. That, he said, is why no action has been taken against any hospital, manufacturer or seller in this matter.

The issue now rests with the National Pharmaceutical Pricing Authority, to which the FDA has made several recommendations, including bringing such consumables under the Drugs (Prices Control) Order issued under the Essential Commodities Act, 1955. Mundhe noted that essential medicines are price-regulated, with a standard annual increase allowed, while non-essential medicines fall outside that framework — which is where the problem arises. He argued that hospital consumables should be treated as essential, since they are consumed daily by hospitals for treatment purposes.

He said all stakeholders — consumers, hospitals, manufacturers and regulators — need to be taken into consideration, and that the NPPA will be able to determine whether the situation amounts to systemic exploitation once consultations are held.

In the same interview, Mundhe said two of the three actors served show-cause notices over a Vimal Elaichi advertisement had replied. Shah Rukh Khan, Ajay Devgn and Tiger Shroff received the notices, which alleged the advertisements were surrogate publicity for banned pan masala. Mundhe said adjudication and prosecution proceedings are being started against the actor who has not replied, without giving a breakdown. He said that while they may be stars to some, in this case he views them as advertisers and alleged violators of the law, and that the law will take its own course.

The FDA's Greater Mumbai division issued the notices on August 11. On September 14, the Delhi High Court dismissed a petition by PB Agro LLP, the master licensee for Vimal Elaichi, seeking to quash the notices, holding that it lacked territorial jurisdiction.