Moving beyond the healthcare pricing blame game 

Hospitals and healthtech companies continue to attract funding but the growing discontent with the perceived overpricing of every segment of the healthcare value chain, from medicines, med tech products available in hospitals to hospital bills, will deepen patient distrust. 

Over pricing of medical supplies, medicines and inflated hospital bills have been the subject of many social media posts from patients and health activists. The recent spotlight on pricing was most noticeably triggered by Maharashtra FDA chief Tukaram Munde taking to X to flag the differences in institutional purchase prices and the prices paid by patients. (https://indianexpress.com/article/health-wellness/maharashtrafda-tukaram-mundhe-hospital-consumables-mrp-nppa-price-control10880967/) This was based on a survey conducted by the Maharashtra Food and Drug Administration (FDA), which found wide gaps between procurement prices and printed maximum retail prices (MRPs) of hospital consumables like IV sets, etc. Maharashtra FDA then submitted a proposal to the National Pharmaceutical Pricing Authority (NPPA) seeking price controls on frequently used hospital consumables and medical devices. 

Industry associations have urged restraint and policy debate on the issue and referred to recommendations shared during previous discussions on the issue. But this debate has once again pitted hospitals against medical device manufacturers. Representing hospital managements, the Association of Healthcare Providers of India (AHPI) has called for a balanced and evidence-based approach to discussions around the pricing of medicines and consumables in hospitals, with Dr Girdhar Gyani, Director General, AHPI emphasising that their price should be considered in the context of the complete healthcare delivery ecosystem and the responsibility hospitals undertake for patient safety and clinical outcomes. (https://www.expresshealthcare.in/news/ahpi-calls-for-holistic-approach-to-pricing-of-medicines-and-consumables-in-hospitals/455400/).

Taking forward this rationale, Siddhartha Bhattacharya, Secretary General, NATHEALTH, (Healthcare Federation of India), posits that the right question is not only, ‘What did the hospital buy the device for?’ but also, ‘What did it take to make that technology safely, immediately and effectively available to the patient?’ NATHEALTH’s membership includes a cross-sector group of members across hospitals, medical technology, diagnostics, pharmaceuticals, and healthcare service providers. 

As per the NATHEALTH statement, the hospital is not merely a reseller for sophisticated medical devices and consumables. Before a technology reaches the patient, the hospital may undertake clinical evaluation and selection, maintain multiple configurations and emergency inventory, ensure sterile-chain integrity and traceability, provide trained clinical and biomedical teams, manage expiry and obsolescence risks, maintain specialised infrastructure, safe disposal and assume responsibility for quality, safety and outcomes while ensuring compliance to all safety regulations. 

Similar to AHPI’s stance, NATHEALTH therefore calls for an evidence-based and differentiated framework that distinguishes basic consumables from clinically differentiated and highcomplexity medical technologies. The policy objective should not simply be to focus on a fixed markup; it should be to determine what constitutes a fair and transparent patient price after recognising the legitimate cost and value involved in making the technology clinically available and integrate it as part of an overall package that is reimbursed either by patient or insurance. 

Representing domestic manufacturers of medical devices, the Association of Indian Medical Devices Industry (AiMeD), has called for rationalised trade markups instead of extreme caps, with a workable 2–6x band and pilot-based, evidence-driven policy intervention. In the statement, Rajiv Nath, Forum Coordinator, AiMeD Rajiv Nath, Forum Coordinator, AiMeD, recommends that rationalised markup should be tested through pilots first, as executing a proposed strategy as a pilot is policy making by evidence. Further, the pilots should be uniform and national in design, avoiding state-by-state caps that fragment the market. 

Commenting on AHPI’s statement that the MRP is determined by the manufacturer and is not independently fixed by hospitals, AiMeD avers that “in practice, MRPs are dictated by hospital buyers, who decide whether a brand will be entertained for business. Ethical manufacturers are compelled to comply with this skewed system if they wish to remain in the market.” 

Nath of AiMeD asks a counter question: “Why should the onus not shift to hospitals and retailers for ensuring fair pricing? Holding manufacturers solely accountable ignores the structural imbalance. The current system rewards inflated margins, penalises ethical suppliers, and ultimately harms patients. A collaborative pilot on transparent trade‑margin caps can demonstrate how responsibility can be shared fairly across the value chain.” 

Appreciating AHPI’s call for a fact‑based review of medical product pricing, he points out that AiMeD has already suggested a few categories of devices as pilots for rationalisation and invites AHPI and NATHEALTH to work jointly with AiMeD on these pilots—fact‑checking as AHPI desires, identifying products where hospitals seek higher margins as compensation, and agreeing on what is rational versus what is clearly distortion. 

As medical inflation continues to rise, pricing seems to be becoming a blame game between hospitals and medical device/medtech manufacturers. The long term reputational damage to the entire sector will include policy makers too, if they do not step in to facilitate a more collaborative approach between the different sections of the healthcare ecosystem and resolve the situation. 

VIVEKA ROYCHOWDHURY, Editor
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