Mundhe flags 2,841% markup on hospital consumables, seeks NPPA review

Mundhe's foray into hospital pricing follows an aggressive run at Mumbai's food sector earlier this year, when his inspections led to the temporary shutdown of several well-known eateries over hygiene violations.

New Delhi: Some hospital surgical consumables and medical devices are being sold at markups as high as 2,841% over their trade procurement price in certain cases, according to a Maharashtra government survey—prompting the state's food and drug regulator, Tukaram Mundhe, to seek a national review of device pricing rules.

Maharashtra Food and Drugs Administration Commissioner Tukaram Mundhe has written to the Department of Pharmaceuticals and the National Pharmaceutical Pricing Authority (NPPA), the country's drug pricing regulator, seeking a review of the survey's findings and appropriate action—including capping trade margins or bringing essential device categories under structured price monitoring.

Mundhe's foray into hospital pricing follows an aggressive run at Mumbai's food sector earlier this year, when his inspections led to the temporary shutdown of several well-known eateries over hygiene violations. The move made him one of the state's most closely watched regulators—and signals that hospitals and device makers should expect the same level of scrutiny.

"Our survey has revealed an extraordinary disparity between the trade procurement price and the printed maximum retail prices (MRP) of medical devices used in inpatient care, reaching as high as 2,841% in some cases, including IV sets, syringes, nebulizers and oxygen mask products," Mundhe told Mint over a phone call.

These products remain outside the direct ceiling-price mechanism under the Drugs (Prices Control) Order, 2013 (DPCO), according to the 10 August communication, titled "Market Survey Report of purchase and sale price variations in Medical Devices (Surgical items used in IPD)," reviewed by Mint.

The DPCO, issued by the ministry of chemicals and fertilizers under Section 3 of the Essential Commodities Act, 1955, empowers the NPPA to regulate and enforce statutory ceiling prices for essential medicines and notified medical devices—a list that Mundhe's survey—found excludes many hospital surgical consumables.

The NPPA is examining whether manufacturers and intermediary supply channels are adding large markups between wholesale procurement prices and the prices ultimately charged to patients, according to two officials who declined to be named, citing rules. The authority has also received similar representations from drug commissioners in Punjab, Rajasthan and Tamil Nadu, the officials said.

"The NPPA is cross-checking company filings and internal price lists to assess whether formal margin-capping mechanisms are warranted. We are analyzing our own data and comparing this against the price lists companies file with us," the first official said.

According to the Maharashtra survey, private hospitals procured catheters at ₹29.41 against an MRP of ₹310, while IV infusion sets bought at ₹11.05 were billed to patients at ₹325. "That means there exist huge margins in this, or there is some quality issue, or there is something else that requires examination," the official added.

Mundhe said the absence of strict statutory price caps under DPCO 2013 has allowed "unchecked trade-level profiteering" among device manufacturers and distributors. "Unlike scheduled medicines under the Drugs (Prices Control) Order, 2013, many categories of medical devices fall outside strict statutory price controls, allowing unchecked pricing practices to persist," he wrote, calling for margin rationalisation, an inter-agency review, and guidelines to regulate the permissible gap between trade procurement costs and declared MRPs.

"This is not merely a pricing issue; it is a patient-protection issue," Mundhe told Mint over the phone, confirming his communication. "There is a significant asymmetry of information in healthcare, with patients often unable to assess whether the price they are charged is reasonable. When a product procured at a low trade price carries an exceptionally high MRP, the patient ultimately bears the financial burden."

Private hospitals say a balanced, evidence-based regulatory approach is the key.

"Profitability is essential for hospitals to invest in infrastructure, technology and patient safety. However, it should never come at the cost of transparency or patient trust," said Dr Aashish Chaudhry, managing director at Aakash Healthcare, New Delhi. "The objective should be greater transparency and accountability across the ecosystem, while ensuring hospitals remain financially sustainable and patients are protected from unjustified costs."

Queries emailed to the offices of the Chemicals and Fertilizers minister and Health and Family Welfare minister JP Nadda; spokespersons for the ministries of Chemicals and Fertilizers and Health and Family Welfare; the Department of Pharmaceuticals; the NPPA chairman; the Central Drugs Standard Control Organisation (CDSCO).

Questions to the FDA commissioners of Rajasthan and Tamil Nadu remained unanswered till press time, as did queries emailed to the Punjab state government and FDA commissioner.

About the Author

Priyanka Sharma is a journalist at Mint, where she covers the Union Ministry of Health and the pharmaceutical industry. Her work focuses on explaining government policies and how they impact healthcare and the medicine market in India. With 12 years of experience in journalism, she has built a reputation for providing clear and honest news on important health topics that affect the entire country.<br><br>Her educational background includes a journalism degree from the prestigious Indian Institute of Mass Communication (IIMC) and specialized training in public health from the Public Health Foundation of India. Before her current role at Mint, Priyanka worked with India Today, The Pioneer, and ANI. She also served as a lead consultant for the National Health Authority, which gave her firsthand knowledge of how the government manages large-scale health programmes.<br><br>Priyanka is based in New Delhi and is an avid traveller who loves visiting the mountains. She has a great interest in regional flavours, particularly South Indian food.