Karnataka flags up to 52x markup on high-cost drugs, writes to Centre as raids continue

Hospitals across Karnataka have been billing patients up to 52 times the actual procurement cost of high-value medicines and consumables, the state’s Food Safety and Drug Administration (FSDA) has found — prompting the government to write to the Centre seeking price regulation and to continue its raids. Health and Family Welfare Minister U. T. Khader, in a letter dated September 23, flagged the gap between institutional landing costs and maximum retail prices (MRP) to the Union Health Minister and the National Pharmaceutical Pricing Authority (NPPA).

The FSDA’s investigations found pharmaceutical companies supplying medicines to hospitals at heavily discounted institutional prices while patients were billed at or near the printed MRP — markups ranging from 10 times to over 52 times the procurement cost. Extreme pricing anomalies were found in 253 drugs.

The numbers are stark. Gufipol, made by Criticare: landing cost ₹86, MRP ₹4,528 — a 52.6-times markup, or 5,165%. Guficycline-50 injection: ₹160 to ₹7,110 (44.4 times). Terlitis: ₹118 to ₹4,416 (37.4 times). Cancer drugs: Cytax 100 mg at ₹342 landing cost billed at ₹3,836 MRP (11.2 times); Taxocare 120 mg ₹1,000 to ₹21,617 (21.6 times); Canmab 440 mg ₹6,600 to ₹57,457 (8.7 times); Bevatas 400 mg injection ₹5,850 to ₹62,690 (10.7 times). Even basic consumables: an adult nebuliser mask costing ₹44.50 billed at ₹950 (21.3 times); an IV set at ₹14.75 billed at ₹295 (20 times); an IV cannula at ₹33.21 billed at ₹548 (16.5 times).

Karnataka’s 11-point letter demands mandatory display of both landing cost and MRP on patient bills; expansion of drugs under price control through the Drug Price Control Order; regulation of trade margins on essential high-value medicines and consumables; an inter-ministerial expert group; a national data study; amendments to the DPCO, 2013; rationalisation of trade margins; expansion of the National List of Essential Medicines; and an audit and enforcement mechanism.

The enforcement drive continues. A special verification drive on September 25 and 26 covered wholesale premises, hospitals and establishments in Bengaluru and district headquarters — more than 768 consumable items and 189 high-cost drugs — with preliminary findings showing “substantial differences” between landing cost, MRP and actual sale price. The FSDA said the exercise will continue in phases; the next phase will target antiretroviral drugs, higher-generation and critical antibiotics, medical devices and hospital consumables “with substantial financial implications for patients”.

The findings expose a supply chain in which the sickest pay the most: cancer patients billed eleven times the procurement cost of their drugs, while hospitals pocket the spread between discounted institutional rates and the MRP. Karnataka’s letter puts the ball in the Centre’s court — price control, the state argues, cannot be left to hospital billing desks.