BackDengue death: Fortis charged 1,700% premium on some medical devices, says NPPA
According to the NPPA, Fortis Memorial Research Institute in Gurugram had charged a margin of up to 1,737% on procurement price on a three-way stopcock
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New Delhi: Fortis Hospital at Gurugram charged as high as 1,700% margin on consumables and medicines used for the treatment of a seven-year-old dengue patient who subsequently died, the National Pharmaceutical Pricing Authority (NPPA) said on Friday.
According to the NPPA, Fortis Memorial Research Institute in Gurugram had charged a margin of up to 1,737% on procurement price on a three-way stopcock. The drug price regulator had sought the details from the hospital, following allegations by the patient’s parents that the hospital overcharged of medicines, gloves and syringes charged from Fortis.
In an office memorandum released late on Friday, NPPA displayed the prices at which Fortis procured the medicines from the distributors, the maximum retail prices (MRPs) at which the hospital billed the family and how much each medicine and consumable was marked up.
According to the NPPA, for medicines under price control, the markups that Fortis took were anywhere between 5% and 350%. However, for those not under price control, the family was billed anywhere between 10-200%. Additionally, for consumables, they charged as much as 1,737% more than what the hospital paid for the products.
The procurement price of the consumable per unit stood at Rs5.77 while the hospital charged Rs106 per unit for the product, it added.
The consumables listed by the NPPA included items such as syringes, gloves and towels, among others.
“NPPA shall be taking necessary follow up action as per existing law and within its jurisdiction," stated NPPA in its notification.
According to Malini Aisola of All India Drugs Action Network (AIDAN), “Fortis completely violated the Drug Pricing Control Order and strictest action be taken against the hospital".
“As per the DPCO (drug price control orders), the markups for retailers for scheduled drugs are 16%. Fortis, in this case acting as the point of sale to the family, has completely violated this. In the cases of non-scheduled and consumables also, Fortis has kept obscene margins above the procurement prices," Aisola said, adding that “the government take the strictest action to curb the excessive markups charged by private hospitals which has become the norm and bring immediate price control on medical devices deemed as drugs".
Replying to the allegations of over charging, Fortis healthcare in a statement said that it does not charge “any drug or consumables above the printed MRP and there is no violation of drug price control order. It should also be noted that our end price to the patient is very much in line with what other private hospitals in India charge. Looking at individual prices of any single item as a stand alone takes the margin/profit topic out of context. To understand the total profit scenario and overall business performance, one should look at the financial margins for the Fortis hospital business. As such, it should be noted that the Fortis hospital business reported operating profit (EBITDA) hover the last four published quarters of 5 to 6% and a negative PAT(profit after tax) for the same period of time."
Aisola said that the violation by Fortis of 16% rules means that the DPCO provisions come into play for recovery of the overcharged amount and further penalties.
Rajiv Nath, forum coordinator at Association of Indian Medical Device (AIMED) said that “we are interested in Systemic Correction and not witch hunting and have been highlighting this malady infecting our healthcare system for many years—problem is (the) government does not act, and when it does regulate, it seems to be an overkill at times . Encourage ethical manufacturers, ethical traders and ethical healthcare providers."
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