Health rights organisations have renewed their demand for stronger regulation of pricing in India’s private healthcare sector. The Jan Swasthya Abhiyan and the Working Group on Access to Medicines and Treatment have called for ceilings on charges levied by private hospitals for procedures, services and treatment, along with limits on trade margins for medicines, medical devices and consumables. Their appeal comes amid ongoing scrutiny by the Supreme Court of high mark-ups on medicines sold through hospital pharmacies.
The Core Demands
In a joint statement, the groups argued that the absence of a uniform mechanism to regulate hospital charges has left patients vulnerable to high and often arbitrary bills. They have urged both the central and state governments to introduce ceilings on what private hospitals can charge and to create accessible, time-bound systems through which patients can challenge excessive or unjustified billing.
On medicines and related products, the organisations have sought immediate fixation of maximum trade margins. They contend that the maximum retail price should not function as a licence for hospitals to charge patients several times the price at which they themselves procure the items. Where clinically appropriate, patients should also have the freedom to purchase medicines and consumables from outside the hospital.
The groups have further recommended a competition-law review of practices that may restrict patient choice or create anti-competitive conditions, and the establishment of an independent grievance redress mechanism.
Context of Supreme Court Scrutiny
The demands coincide with recent observations by the Supreme Court on steep differences between the price at which certain medicines reach retailers or hospitals and the printed maximum retail price. In one widely noted example, a cancer medicine available to retailers at around Rs 2,700 carried an MRP of approximately Rs 27,000. The Court has questioned such mark-ups and the practice of requiring patients to buy medicines only from hospital-linked pharmacies. It has also asked the government to examine the regulation of trade margins more broadly.
These judicial observations have given fresh impetus to long-standing concerns about transparency and fairness in hospital billing.
Scale of Charges and Mark-ups
According to data presented by the health groups, leading corporate hospital chains have charged average daily amounts in the range of Rs 60,000 to Rs 78,000 per patient in recent financial years. After accounting for expenses, taxes, interest and maintenance, estimated surpluses per bed have been placed in the range of several tens of lakhs of rupees annually for some major chains.
On individual medicines and consumables, the organisations cited examples of substantial mark-ups. A paracetamol infusion procured for around Rs 33 was billed to patients at Rs 408 in one set of cases. Analysis of a sample of medicines showed median mark-ups commonly in the range of 200 to 400 per cent, meaning patients often paid three to five times the hospital’s purchase price. Similar patterns were reported for everyday consumables such as needles and intravenous sets, where the gap between procurement cost and patient billing was large.
The groups emphasise that when patients are required to purchase only from the hospital pharmacy, ordinary price competition disappears. In such circumstances, the printed MRP can become the effective selling price regardless of the hospital’s actual acquisition cost.
Gaps in the Existing Regulatory Framework
India’s Clinical Establishments Act of 2010 provides a legal framework for the regulation of clinical establishments and envisages government-determined ranges of charges. Health activists note, however, that effective implementation of rate regulation under the Act has remained limited. As a result, private hospitals largely set their own charges for procedures and services, while patients possess little bargaining power once treatment has begun.
Medicines present a parallel challenge. Price control under the existing drug pricing order applies primarily to scheduled formulations. A large share of the market consists of non-scheduled medicines, where manufacturers have greater freedom to set initial prices, subject only to limits on annual increases. When these products are sold through captive hospital pharmacies at or near MRP, the cumulative effect on patient bills can be significant.
Impact on Patients
For many households, a hospital stay already represents a major financial risk. High daily charges combined with elevated margins on medicines and consumables can push total bills well beyond what families anticipate or can afford. Even patients covered by public insurance schemes may face difficulties when the billed amounts reflect these mark-ups, ultimately placing pressure on both household finances and public reimbursement systems.
The lack of advance clarity about likely costs and the absence of easy mechanisms to question bills further weaken the patient’s position. Health groups argue that regulation is required precisely because the ordinary market mechanisms of comparison and choice are constrained once a patient is admitted.
The Case for Structured Regulation
The organisations maintain that reasonable ceilings on hospital procedure charges and clear limits on trade margins would not eliminate private healthcare but would introduce predictability and curb excessive pricing. Transparent procurement and billing practices, coupled with the option for patients to source certain items externally where safe and practical, could restore a measure of competition and accountability.
They also point to the need for time-bound grievance systems so that disputes over bills can be resolved without prolonged hardship. A competition-law examination of vertical arrangements linking hospitals, pharmacies and related services is seen as another necessary step to ensure that market power is not used to the detriment of patients.
Looking Ahead
Private healthcare has expanded rapidly in India and now forms a large part of the service delivery landscape. The health groups contend that regulation has not kept pace with this growth. Their current demands seek to address both the broad structure of hospital charges and the specific problem of high margins on medicines and consumables.
Whether through stronger implementation of existing legislation, new rules on trade margins, or a combination of measures, the call is for a framework that protects patients from unpredictable and excessive costs while allowing private providers to operate on a sustainable basis. The Supreme Court’s attention to pharmacy pricing has brought these issues into sharper public focus. The response of central and state governments will determine whether the gap between the cost of care and the bills patients receive begins to narrow in a systematic way.
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