Lok Sabha Question No. 5167 (UNSTARRED), answered on 2018-03-27
Subject: Study by NPPA
Ministry: CHEMICALS AND FERTILIZERS
Asked by: KAMAKHYA PRASAD TASA, JOSE K. MANI

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF PHARMACEUTICALS

LOK SABHA UNSTARRED QUESTION NO.5167 TO BE ANSWERED ON 27 th  March,2018

## Study by NPPA

5167.  SHRI KAMAKHYAPRASAD TASA: SHRI JOSE K. MANI:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether  as  per  the  study  conducted  by  National  Pharmaceutical  Pricing Agency  (NPPA)  hospitals  have  been  making  profits  up  to  1700  per  cent ondrugs, consumables, medical devices and diagnostics;
- (b) whether private hospitals have been employing various strategies of profiteering like bulk buying and insisting patients to buy drugs, devices and disposable from their own in-house pharmacies;
- (c) if so, the details thereof and the reaction of the Government thereto;
- (d) whether the pertinent area has been left unregulated and States have been reluctant to adopt and implement the Clinical Establishment Act, 2010; and
- (e) if so, the steps taken by the Government to prevail upon the States to adopt the said legislation or pass a State-specific law on similar ground?

## ANSWER

## MINISTER  OF  STATE  IN  THE  MINISTRY  OF  ROAD  TRANSPORT  AND HIGHWAYS;  MINISTRY  OF  SHIPPING  AND  MINISTRY  OF  CHEMICALS  AND FERTILIZERS (SHRI MANSUKH L. MANDAVIYA)

(a): Yes,  Madam.  Based  on  complaints  and  media  reports  on  overpricing  and inflated  bills  to  the  patients  by  some  hospitals,  National  Pharmaceutical  Pricing Authority  (NPPA)  had  asked  for  details  of  billing  from  these  hospitals  under  the provisions of the Drugs (Prices Control) Order, 2013 (DPCO, 2013). Based on the data submitted by the hospitals, NPPA has observed that there is an upward gap between the procurement prices of drugs and amounts at which the drugs are billed to the patients for some scheduled medicines, non-scheduled medicines, consumables and devices used in the treatment of patients. As per the provisions of DPCO, 2013, while arriving  at  a  ceiling  price  of  scheduled  formulations  and  retail price  of  new  drugs,  sixteen  percent  margin  to  retailer  is  counted.  According  to NPPA's report, the highest margin (difference of amount billed for the formulation by the hospitals and their procurement price expressed in percentage terms) available to these hospitals on scheduled medicines, non-scheduled medicines, consumables and non-scheduled  medical  devices  are  357%,  1192%,  1737%  and  1271% respectively. Study reports prepared on the basis of information submitted by these hospitals is available under the 'What's New' link of website of NPPA. (www.nppaindia.nic.in).

(b) & (c): Public  health  being  a  State  subject,  the  primary  responsibility  of management of hospitals lies with the State/Union Territory Governments. However, the National Council for Clinical Establishments, Ministry of Health & Family Welfare (MoH&FW)  has  approved  a  standard  list  of  medical  procedures  and  a  standard template for costing of medical procedures and the same have been shared with the States for appropriate action.

(d) & (e): The  Government  of  India  has  enacted  the  Clinical  Establishments (Registration and Regulation) Act, 2010 for registration and regulation of the Clinical Establishments with  a  view  to  prescribing  the  minimum  standards  of  facilities  and services provided by them. The States are being continuously persuaded to adopt Clinical Establishments Act, 2010 or to consider bringing a State specific legislation if  adoption  of  the  Act  is  not  found  suitable.  The  Act  is  presently  applicable  only  in eleven States viz.  Sikkim, Mizoram, Arunachal Pradesh, Himachal Pradesh, Uttar Pradesh, Bihar, Jharkhand, Rajasthan, Uttarakhand, Assam, Haryana and all Union Territories  except  Delhi.    Health  being  a  State  subject,  the  implementation  and enforcement of the Act falls within the ambit of State/UT Governments.

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