Mr. Tukaram Mundhe, Commissioner of FDA, Maharashtra, has raised the issue of the pricing structure of hospital medical consumables and very rightly said that similar to the price control of medicines sold in pharmacies, NPPA (National Pharma Pricing Authority) should frame a price control mechanism for the hospitals too. In September 2026, he asked the central government’s drug-pricing regulator NPPA to intervene after a Maharashtra FDA survey found very large differences between hospitals’ purchase prices and the MRPs charged to patients.

Figures reported by Mundhe from the FDA’s survey of hospital consumables are as under:

• IV infusion set: reported purchase price/trade price ₹11.05; reported printed MRP ₹325
• Nebuliser / oxygen mask: reported purchase price/trade price ₹40–45; reported printed MRP ₹650–715
• 10 ml syringe: reported purchase price/trade price ₹6.75; reported printed MRP ₹57.20
• IV cannula: reported purchase price/trade price ₹22.50; reported printed MRP ₹424
• Autofusion set: reported purchase price/trade price ₹70; reported printed MRP ₹393

Source: The Indian Express, September 2026.

These figures illustrate the gap between procurement cost and the printed maximum retail price. However, the difference is not necessarily the hospital’s net profit: procurement and MRP figures alone do not establish the actual transaction price, distribution costs, taxes or the amount ultimately retained by each party in the supply chain. Nevertheless, the fact remains that the hospitals have been charging unreasonable prices to the patients. Mundhe’s central argument is that patients receiving treatment often cannot compare prices or refuse essential consumables, leaving them vulnerable to excessive charges.

Mundhe clarified that Maharashtra FDA can take action when a product is sold above its legally applicable MRP, but it cannot simply penalise a hospital or manufacturer for charging a price within that MRP merely because the procurement price was much lower. Hence, he referred the issue to the NPPA. Mundhe has sought a review of the pricing framework for commonly used hospital consumables and medical devices, including consideration of appropriate price ceilings or trade-margin controls. Under Paragraph 4 of the Drugs (Prices Control) Order, 2013 (DPCO), the Government determines ceiling prices for scheduled formulations using a prescribed methodology. Paragraph 19 separately empowers the Government to fix or revise prices of drugs in extraordinary circumstances in the public interest. Any extension of comparable controls to hospital consumables and medical devices would require careful consideration of their regulatory classification, cost structures and the applicable legal provisions.

Mr. Mundhe’s action has triggered central-government scrutiny. In September 2026, Union Health and Chemicals and Fertilisers Minister Mr. J. P. Nadda directed the Department of Pharmaceuticals and NPPA to discuss the issue with stakeholders. The Centre also sought a report from the NPPA on the discrepancies.

Mr. Mundhe’s observations highlight the following major gap in the price control of medicines:

• Scheduled medicines: Their prices are subject to applicable ceiling-price rules under the DPCO (Drugs (Prices Control) Order).
• Medical consumables and certain other products: Their pricing may not be subject to equivalent ceiling-price controls.

Mundhe wants the regulatory framework reviewed and the above major gap addressed so that the patients are better protected. The price and affordability of medicines have long been sensitive public-health issues in India. Research based on historical household expenditure data estimated that 55 million Indians were pushed into poverty in a single year due to out-of-pocket healthcare expenses, including approximately 38 million who fell into poverty because of expenditure on medicines alone. Medicines continue to account for a substantial share of out-of-pocket healthcare expenditure, particularly for patients requiring long-term treatment for chronic diseases. Ensuring access to affordable medicines is therefore essential to making healthcare accessible to all sections of society, especially the economically weaker sections. Patients in hospitals face much more difficulty in this regard as they are compelled to buy the medicines at the hospitals at exorbitant prices.

Scope for price control on medical devices

The provision under Para 19 of the DPCO, 2013 was invoked by the government in the recent past to regulate the prices of cardiac stents and knee implants. During the first wave of COVID-19, several private hospitals in India were reported to have charged exorbitant rates for treatment, imposing a heavy financial burden on patients and their families. In response to complaints of overcharging, the Central and State Governments introduced measures to regulate hospital charges. A Delhi High Court judgement in 2021 directed NPPA to regulate the prices of certain medical devices. Following the court order, trade margins on oxygen concentrators, pulse oximeter, blood pressure monitoring machine, nebuliser, digital thermometer and glucometer were capped. However, despite these interventions, excessive and arbitrary billing continued during the second wave, indicating that the price-control measures and their enforcement were not sufficiently effective.

The NPPA, under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, regulates the prices of medicines and specified medical devices under the applicable legal framework. However, the existing controls do not impose a uniform ceiling price on every medical consumable or device used in hospitals. This leaves scope for a review of the pricing framework, particularly for essential products that patients have little choice but to use during treatment at the hospitals. In February 2024, a parliamentary standing committee on Chemicals and Fertilizers had recommended that the devices which are required for critical care to the patients should be listed under National List of Essential Medicines (NLEM).

Price controls on medical procedures and treatments at Hospitals?

One must admit that it is not an easy task to fix the price bands for all medical procedures and treatments offered by hospitals since the costs will be different to different categories of hospitals as the cost of overheads are not the same for all the hospitals. Nevertheless, it is possible to fix a differential pricing mechanism by classifying the hospitals into various categories like general hospitals, nursing homes, specialty hospitals, corporate hospitals etc. In 2011-12, the Ministry of Corporate Affairs advised the Institute of Cost Accountants of India (now known as Institute of Cost and Management Accountants of India or CMA) to arrive at a sample cost template, which can be used for arriving at cost of any two vital medical procedures. Accordingly, the CMA (India) prepared in 2015 “Guidance Note on Cost Management in Healthcare Sector”, detailing Costing Approach in Healthcare Sector, Costing Summary Template for Several Procedures and Hospital Management Information System. It appears this initiative was not taken to its logical end subsequently. Now that the Supreme Court is insisting on price control for all medical procedures and treatments offered by hospitals, the government may revive the guidance note prepared by CMA (India) and get an updated version of the same and in line with that devise a set of guidelines for NPPA to enable the pharma sector regulator to enforce price control on major medical procedures and treatments (if not for all) offered by hospitals as well as enforcing price controls on the drugs and medicines administered to the patients at the hospitals.

The Supreme Court, while responding to a PIL, directed the Union Government to find a way to fix the price bands for all medical procedures and treatments offered by hospitals in the country and report back to the Court, failing which the Court indicated to impose the medical rates charged under the Central Government Health Scheme (CGHS) on all hospitals as an interim measure (27 February 2024). Unfortunately, the Supreme Court’s initiative to standardise hospital treatment charges has not yet resulted in a nationwide, binding schedule of medical rates for all hospitals. The Union Government’s own response in Parliament in March 2026 confirms that the issue remained unresolved.

Incidentally, on 27th October 2026, the Supreme Court, while hearing the arguments under the Public Interest Litigation (PIL), questioned why the Union government was reluctant to bring a wider range of medicines under price control, observing that its reliance on market forces and concerns about pharmaceutical-industry growth cannot justify leaving patients exposed to medicine prices that may be hundreds of times higher than procurement costs. The Centre had earlier tried to defend its decision to cap trade margins on 137 non-scheduled anti-cancer drugs at 30% of the MRP (translating to a ~42.86% markup on the stockist price).

The judges questioned whether a 30% margin cap makes a meaningful difference if the baseline MRP was already arbitrarily inflated by manufacturers or hospitals, and asked why a uniform trade margin (such as a 16% cap like scheduled drugs) cannot be applied across a wider range of medicines. Early versions of these underlying PIL petitions date back to legal filings between 2022 and 2024 to demand government intervention against medical inflation. On 27 October 2026, the Supreme Court formally concluded active oral arguments from all sides and reserved its final verdict. The judges granted the central government, private hospital bodies, and pharmaceutical manufacturers a short window to submit their final written statements before the official court judgment is delivered.

Let us hope that the Supreme Court in its final verdict would direct the government to work on not only reducing significantly the prices of drugs and medicines but also extend the price control to cover major medical devices and major medical procedures and treatments in the hospitals so that healthcare becomes affordable to the common man.

Reference:

• https://www.livelaw.in/top-stories/why-most-medicines-kept-out-of-price-control-regime-supreme-court-questions-centre-reserves-order-556206
• Need for a Paradigm Shift in India’s Health Care, by Dr. B.N.V. Parthasarathi, published in ASCI Journal of Management (Vol.48, No.2 (SPL), September, 2019. ISSN No.0257-8069.
• https://icmai.in/ClntAbout/PDPublication.