New Delhi [India], October 1 (ANI): 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, 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.
Speaking on this, Dr Girdhar Gyani, Director General, AHPI, said, “Hospitals are not merely selling medicines; they are delivering comprehensive, round-the-clock clinical services, which include stocking, preparation, quality checks and safe and timely administration of the drugs, thereby ensuring desired clinical outcomes for every patient. Medicines and consumables are an important part of this continuum, but their price cannot be viewed in isolation from the overall cost and responsibility of delivering safe and effective patient care.”
Medicines and consumables represent only one component of a hospital bill. The cost of hospitalisation also encompasses specialised clinical manpower, diagnostics, medical equipment including depreciation, nursing, infrastructure/utilities, infection control, clinical support services and continuous patient monitoring.
Patients visit hospitals not to get medicines but to get comprehensive medical care, and hence the pricing of drugs must not be looked at in isolation.
AHPI also highlighted the distinction between hospital revenues and profitability, noting that hospitals operate with high operating costs and capital investments, with operating margins for many hospitals typically in the range of 8–12 per cent. Labelling hospital pricing as “profiteering” without considering the complete cost structure, AHPI said, can present an incomplete picture of healthcare delivery.
With respect to medicines, it may be relevant to mention that hospitals receive bundled payments (packages) from patients through private insurance and government schemes, with no provision of charging separately for medicines or consumables.
For patients coming otherwise, the hospitals and even retailers generally dispense drugs at the Maximum Retail Price (MRP) printed by the manufacturer, subject to applicable regulations. The MRP is determined by the manufacturer and is not independently fixed by hospitals.
From a healthcare supply chain and hospital operations perspective, fixing a uniform 16% margin can improve transparency and affordability, but it should not be treated as a one-size-fits-all solution. Medicines have very different supply chain requirements.
A fast-moving chronic medicine, a low-volume lifesaving drug, a cold-chain product and a high-cost speciality medicine cannot necessarily operate on the same economics. Pharmacy businesses also carry inventory, expiry, working capital, manpower, storage, regulatory compliances and service costs.
Speaking specifically about oncology medicines, these are not a homogeneous category; high-cost biologics, targeted therapies, immunotherapies, oral anticancer medicines and supportive drugs have very different procurement, storage, wastage, cold-chain and handling requirements.
Availability needs to be protected along with affordability. A flat 16 per cent could therefore make some products commercially unattractive to stock.
Dr Gyani added, “Affordability and transparency in healthcare are important objectives, but they must be pursued without compromising patient safety or overlooking the actual cost of delivering quality care. A meaningful discussion on healthcare affordability must examine the entire delivery and supply chain rather than isolating the price of medicines from the wider services and responsibilities undertaken by hospitals.”
AHPI supports greater transparency and affordability in healthcare and advocates a holistic approach to healthcare pricing through activity-based scientific study that takes into account regulatory requirements, supply-chain considerations, clinical responsibilities and the investments required to maintain quality, safety and patient outcomes. (ANI)
AHPI calls for holistic approach to pricing of medicines and consumables in hospitals
