On his last day in office Wednesday, Food and Drug Administration (FDA) Commissioner Dr Harshdeep Kamble signed a lengthy report sent to the National Pharmaceutical Pricing Authority (NPPA) asking for a price cap on balloon and guiding catheters, which, the report said, were fetching private hospitals massive profit margins. In February, the central regulatory body had capped prices of stents.
The pricing authority soon received complaints of price hike in non-stent components in hospital bills. Currently, catheters used for life-saving angioplasty procedures are drug-notified medical devices under the Drug and Cosmetics Act, 1940, but their prices have not been capped.
A detailed study of 12 hospitals, distributors and importers by the FDA in Maharashtra, Delhi and Chennai found that private hospitals were earning a profit margin of 25 to 472 per cent on six varieties of balloon catheter and 50 to 529 per cent on four brands of guiding catheter.
For instance, if the manufacturing (or landing) cost of balloon catheter is Rs 5,918 for distributors and a hospital purchases it for Rs 7,950, the catheter is sold at Rs 22,000 to the patient, according to what the FDA report observed in case of Fortis hospital (Mulund).
The hospitals inspected include Fortis hospital (Mulund), Hiranandani Healthcare (Vashi), Jupiter (Thane), Wockhardt (Nagpur), BSES, Jaslok, Asian Heart Institute, and three other hospitals in Mumbai and one each in Pune and Aurangabad. According to FDA officials, the collection of data for the last four hospitals is still under process. “But we found that eight of the 12 hospitals were storing medical devices on unlicenced premises. Show-cause notices have been issued to them,” said FDA Commissioner Kamble.
The FDA conducted inspections of importers in Chennai and Delhi earlier this month and found that their profit margin for balloon catheters ranged between 17 and 200 per cent.
The margin varied between 20 and 211 per cent for distributors. The hospitals earn the maximum profits despite pricing catheters below or at par Maximum Retail Price (MRP), gaining as high as 529 per cent profit on one catheter, according to the report.
The MRP of catheters ranges between Rs 20,000 and Rs 28,000.
“There is no price cap. And hospitals cannot be held accountable for that. But since it is drug notified medical device, our report explains huge profits made at each level,” said Assistant Commissioner Madhuri Pawar.
The inspections were carried out by a team of 10 drug inspectors. At least seven hospitals were found reusing catheters after sterilisation.
The FDA report recommended NPPA on regulation of prices of balloon and guiding catheters, fixed profit margin in supply chain right from importer to hospital, and inclusion of catheter under the National List of Essential Medicines. “Regulation on prices of the notified medical devices on every level is required on top priority,” the report read.
Speaking to The Indian Express, NPPA Chairman Bhupendra Singh said: “This comes under the purview of the health ministry and we cannot cap prices on our own.”
He added that he was yet to read the Maharashtra FDA report.
When contacted, the inspected hospitals claimed that they were charging patients below the MRP.
“We offer angioplasty under a package cost and catheter cost is not separately listed in the bill,” said Dr Ajay Thakker, CEO of Jupiter hospital, adding that medical devices were stored on licenced premises.
Dr K Sujatha, centre head for Wockhardt hospital (Nagpur), said, “We have received the observation of FDA and we will comply accordingly. But catheter cost is always part of the package.”
A spokesperson from Fortis and Hiranandani said: “We have no official communication from the FDA on this. We are a law abiding organisation and continue to be bound by regulatory and ethical medical guidelines as mandated by various agencies. We find the query presented unsubstantiated.”
Dr Ashok Mehta, Medical Director of BSES hospital, said: “Ours is a charitable hospital and patients are never overcharged. The prices are always below MRP.” Similar was the response from the Asian Heart Institute authorities, who said they “do not sell anything above MRP in the hospital or violate the trust of patients”.
Jaslok hospital spokesperson said: “We don’t charge 100 per cent margin on cath consumables as alleged. Instead, we charge only 8-12 per cent mark on our cost price. As far as stent is concerned, we are not exceeding the prescribed limit set by the authority.” He added that medical devices were sold from licenced premises on the sixth floor and only some stock was stored in the cath-lab.