Top hospitals made 200-2000% profits: Report

Aditi Tandon

Tribune News Service

New Delhi, February 20

Top private hospitals in Delhi and National Capital Region have been clocking profit margins ranging from 200 to over 2000 per cent on drugs, diagnostics and consumables being billed to patients.

In the first-ever analysis of drug, diagnostics and devices procurement and billing data of four private hospitals, the National Pharmaceutical and Pricing Authority (NPPA) revealed that all hospitals prescribed non-scheduled branded medicines to patients instead of scheduled medicines in order to expand their profit margins. Scheduled drugs are much cheaper since these are part of price control under the National List of Essential Medicines.

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“The total cost on scheduled medicines is only 4.10 per cent compared to 25.67 per cent on non-scheduled formulations. For higher margins, hospitals preferred prescribing non-scheduled branded medicines though scheduled medicines under NLEM are supposed to cover all essential medicines,” the apex drug pricing authority said, calling for a policy intervention.

The NPPA revealed that all these top hospitals charged patients at shockingly high profit margins on scheduled drugs, branded non-scheduled drugs, consumables and medical devices.

Picture this — 67 units of disposable syringes (without needles) which cost the hospital Rs 15.29 each were billed to patients at Rs 13,400 (a margin of 1208 per cent). Profit margins in 18 intravenous infusion sets were also found to be very high. These cost the distributor Rs 5.20, the hospital Rs 8.39 but the patient was billed Rs 2,070.

A similar story is seen across segments — be it scheduled drugs or branded ones. Scheduled Adrenor injections (12) cost the hospital Rs 13.44; the MRP was Rs 52.35 and the patients were billed Rs 628.

Among non-scheduled formulations, hospitals charged patients Rs 42,476 for 10 EMTIG injections bought for Rs 442 each. The profit margin works out to be 856 per cent.

Hospitals even made profits on three-way stop cocks. While they bought 39 units for Rs 5.77 each, they billed these to patients at Rs 4,134.

The NPPA found diagnostics constituted more than 15 per cent of the total cost to patients in hospitals, which were not named. “Diagnostics services do not come under the NPPA and can only be regulated by states through the Clinical Establishments Regulation Act,” the NPPA said.

The authority also said that profit margins in non-scheduled devices used in syringes, cannula and catheters were exorbitant.  The NPPA said that most drugs, devices and disposables were sold by hospitals from in-house pharmacies, making huge profits.

The analysis came after two Delhi-based private hospitals were caught overcharging patients. Fortis Gurugram had charged the family of a dengue death victim exorbitantly. Max Shalimar had recently wrongly declared a newborn dead.