Clamping down on the private hospitals in Delhi and NCR, Delhi health minister Satyendra Jain announced a slew of rules, capping the profits of the private hospitals, after India’s drug pricing watchdog had earlier found that the firms make profits of up to 1,700% on drugs, diagnostics and consumables and forcing consumers to buy from their in-house pharmacies. In a press briefing Satyendra Jain said that hospitals can no longer charge a markup on essential medicines, and they will be sold at MRP. Further, Jain told the press that hospitals cannot force the customers to buy from their internal pharmacies.
For non-essential medicines, the cap would be at 50% above MRP. According to an analysis by the National Pharmaceuticals Pricing Authority (NPPA) the hospitals are arm twisting both consumers and manufacturers and charging exorbitant prices. The analysis revealed that non-scheduled drugs and diagnostic services constituted the major components of bills charged to patients in these hospitals. “It’s amply clear that for claiming higher margins doctors-hospitals preferred prescribing and dispensing non-scheduled branded medicines instead of scheduled medicines,” NPPA said in a statement on Tuesday.
Delhi health minister also clamped down on “packaged surgeries.” As per the new directive, patients will have to pay only half the price for second surgery after taking a package. Further, High risk packages can be sold to the patient which can be priced at a maximum of 20% higher than normal package. These packages will have to be explained to the customers in detail.
Apart from prices of surgeries, the government has also regulated that 50% of the fees must be returned to the customers family in case of death within 6 hours of hospitalisation, and 20% of the bill would be waived off in case of death within 24 hours of hospitalization. The hospitals will now have to return the dead body to the families even if the dues are not fully paid.
Reacting to the new regulations, Abhay, a healthcare analyst told ET Now, “Most hospitals will need to increase prices of other things in order to bear with these new rules. There’s just 12-14% EBITDA margins. Returns on investment is about 8-9%. If it’s healthcare is such a golden goose, why are there no returns?”
The move to clamp down comes after the state government had appointed a nine-member committee in December last year to suggest the scope and process of capping prices. Earlier, there was public outrage on the death of a child due to dengue at a private hospital where the family was charged over Rs 15 lakh for treatment.