India’s growing debate over hospital pricing has raised an important question: should the maximum retail price (MRP) of medicines and medical consumables also determine what patients ultimately pay?
The issue gained attention after a Maharashtra FDA survey highlighted a wide gap between the procurement price of an IV set and its printed MRP. An IV set purchased for about ₹11.05 was found to carry an MRP of ₹325. The findings prompted the Maharashtra FDA to seek greater regulation of hospital consumables and medical devices.
Hospitals argue that the difference between procurement and billing cannot automatically be treated as profit. Healthcare providers incur costs for storage, sterilisation, inventory management, staff, infrastructure and ensuring supplies are available when required. The Association of Healthcare Providers of India has also called for a broader pricing approach rather than viewing individual medicines and consumables in isolation.
At the same time, patients need greater transparency about how prices are determined. Under existing drug-pricing rules, scheduled medicines have regulated ceiling prices, with the ceiling price generally incorporating a 16% retailer margin. NPPA has also used trade-margin controls for selected medical devices, including certain devices covered by a 70% margin cap.
A uniform margin for every healthcare product may not reflect the very different costs involved. A better framework could therefore link permitted margins to factors such as product type, storage requirements, clinical handling and supply-chain costs, while requiring hospitals to clearly disclose procurement and billing prices.
Such a differential margin policy could improve price transparency without ignoring the operational costs involved in delivering healthcare.

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