Bought for ₹86, MRP at ₹4,528: Karnataka Flags Huge Hospital Margins, Urges Centre to Cap Patient Drug Prices to Procurement Costs ​Bengaluru In a major regulatory push against inflated medical bills, the Karnataka #FoodSafety and Drug Administration has petitioned the Centre to curb excessive profit margins in #hospitals, where life-saving #oncology medicines, antibiotics and surgical consumables are procured at steep institutional discounts but billed to admitted patients at the maximum retail price (#MRP). ​In an official communication sent to the National Pharmaceutical Pricing Authority (#NPPA),Karnataka Food Safety and Drug Controller Commissioner K. Srinivas detailed an entrenched pattern of price gouging targeting captive in-patients. Accompanying the representation is a 256 #drug price-verification dossier compiled across hospital pharmacies, revealing retail prices marked up by more than 5,000 percent, above actual hospital landing costs. ​The audit of hospital acquisition prices versus printed MRPs revealed extreme disparities across critical-care injectables,anti-cancer treatments and standard medical supplies. Gufipol, for instance, enters hospitals at an acquisition landing cost of ₹86 but carries an MRP of ₹4,528, reflecting an increase of 5,165.12%. Guficycline 50 injection is procured at ₹160.00 against an MRP of ₹7,110.00, while Guficandin-50 injection shows a jump from ₹850 to ₹21,230. Oncology drugs also showed severe gaps, such as Taxocare 120mg landing at ₹1,000 but marked with an MRP of ₹21,617.58. Even routine consumables saw steep inflation, including vented infusion sets purchased at ₹8.35 and tagged at an MRP of ₹248 alongside pressure monitoring lines sourced at ₹18 and priced at ₹478. ​The state administration emphasized that relying solely on conventional MRP ceilings fails to protect admitted patients, who face an acute information asymmetry and lack an effective choice of alternative procurement at the bedside. Because patients cannot obtain substitutes outside during an admission, hospitals retain the entire commercial margin of deep institutional discounts rather than passing benefits downstream. The regulator asserted that mere formal compliance with charging within the printed MRP does not resolve whether the pricing structure is fair, transparent or aligned with healthcare affordability. ​To correct these systemic market distortions, the state regulator submitted a draft statutory framework proposing amendments to the Drugs (Prices Control) Order, 2013. The proposed mechanism would institute a mandatory hospital price ceiling for patient billing, pegged strictly to the lowest of the notified ceiling price, the printed MRP, or the net institutional acquisition cost plus a capped hospital service margin,suggested between 20 to 30 percent and applicable taxes. ​The submission also seeks compulsory itemized transparency requiring hospital bills to explicitly record procurement costs alongside the permitted service margin and printed MRP. To prevent regulatory evasion, the draft introduces strict anti-avoidance clauses covering retrospective discounts, credit notes, volume rebates and free goods, holding manufacturers and healthcare establishments jointly accountable. It further empowers the NPPA to invoke automatic MRP rationalization whenever a drug's retail price deviates sharply from its institutional transaction average, focusing initially on oncology drugs, high-cost biologics and specialized surgical consumables. #Karnataka Health Minister UT Khader said, "We are not against a reasonable margin for business, but healthcare is not like any other commodity. It must remain patient-centric." @utkhader @DHFWKA @MoHFW_INDIA @Pharmadept