Sunday, March 4, 2018

NPPA Chairman Transfer: We hope the govt. did not succumb to industry pressure?

Dr KK Aggarwal
Recipient of Padma Shri

The chairman of National Pharmaceutical Pricing Authority (NPPA), Drugs Controller General of India (DCGI) have been transferred and Directorate General of Health services (DGHS) has been asked to go on leave.

DCGI was responsible for streamlining all clinical trials and also fought for banning fixed dose combinations (FDCs). NPPA had capped stent prices and that of knee implants. It was now exposing rate variations in disposables and non-NLEM drugs and devices.

Transfers are no doubt a prerogative of the govt., but their timing is inopportune. This move of the govt. may be misunderstood.  We only hope that these transfers were not under the influence of industry pressure.

This would only become clear when Dr S Eswara Reddy, who has been appointed as the new DCGI, and the person who will be appointed NPPA chairman would carry forward work on the issues raised by their predecessors.

What is also surprising is that the NPPA Chairman has been asked to proceed on leave without assigning the work to a chairman-designate making NPPA practically a functionless body as of today.

Let’s revisit the issues that the NPPA Chairman had proactively raised, which probably led to his ouster from this job.

Recent alleged incidents of huge bills for treatment from the relatives of deceased patients in private hospitals in Delhi-NCR have been the cynosure of all eyes and have sparked outrage among the general public. The large amounts have also led to their scrutiny by the regulatory authorities following complaints from the families of the deceased patients.

NPPA is the government regulatory agency, which controls the prices of pharmaceutical drugs and devices in the country. Following the complaints filed by the families, NPPA asked for details of billing from these hospitals and analyzed them as per four categories in a report vide File NO. 27(2)/2017-Div-III/NPPA, GOI, Ministry of Chemicals & Fertilizers, Dept. of Pharmaceuticals, NPPA, dated 20.2.2018, which was put in public domain, as follows:

  • Scheduled formulations based on NLEM 2015 (Schedule 1 of DPCO 2013) and under price control
  • Non-scheduled formulations (not under price control and out of Schedule 1 of DPCO 2013)
  • Consumables not listed as drugs (neither under price control and nor under Schedule 1 of DPCO 2013)
  • Medical devices (neither under price control and nor under Schedule 1 of DPCO 2013)

The breakup of the total bill as per the various components was as follows:

Scheduled formulations

Non-scheduled formulations

Non-scheduled devices (IV cannula, catheter, disposable syringes with/without needles)

Consumables (surgical masks, gloves, etc.)

Diagnostic services

Cost of procedures

Consultation & Medical supervision

Equipment charges

Room Rent




Scheduled formulations constituted only 4.10% of the total bill. In contrast, the total cost of non-scheduled formulations was 25.67% implying that mostly non-NLEM drugs (non-scheduled branded medicines), which do not fall under price control, were prescribed, the cost of which were exorbitantly high. Hospitals are dictating the MRPs for institutional bulk purchase resulting in profiteering on drugs and devices. “Industry, in order to get bulk supply orders is in a way ‘forced’ to print higher MRPs as per ‘market requirements”, says the report.

Consumables such as surgical masks, gloves etc. were nearly 10% of the total bill and more than twice the expenditure on scheduled (essential) drugs (4.10%). These consumables are outside the purview of the NPPA and are not “under any kind of price control or monitoring of MRPs since these are not even listed as ‘drugs’ under Drugs & Cosmetics Act”. So, their costs cannot be regulated even in public interest. Patients were being overcharged for consumables.

The cost of diagnostic services was nearly 16% of the total bill. The hospital was also overcharging for tests and investigations as the charges were higher than those provided by other independently run private centers.

About 50% of the total cost is the cost of drugs and devices and diagnostics, which is not included in the ‘estimate’ given by the hospitals to the patients and their families. “The total expenditure on drugs and devices and diagnostics is substantially high (46%) and does not make part of the publicized ‘estimate’ or ‘package’ (in case of implants) by the hospitals in comparison to ‘procedures’ (11.42%), room rent (11.61%) etc. which are the more visible components.”

In all this, the doctor consultation and medical supervision charges come out to be a meager 12.72%.

What this report reveals is that it is the hospitals, which mainly benefit from the inflated MRPs and the profits wherefrom and not the manufacturers of the drugs and devices and neither the doctors, in contrast to what is popularly perceived.

But indirectly, doctors are responsible for it, for not raising a voice against it. If they are aware that this is happening, they need to protest against such practices. MCI Ethics Regulation 6.3 clearly says that it is our duty to see that the patient is not exploited either by us or through us. 

6.3 Running an open shop (Dispensing of Drugs and Appliances by Physicians): - A physician should not run an open shop for sale of medicine for dispensing prescriptions prescribed by doctors other than himself or for sale of medical or surgical appliances. It is not unethical for a physician to prescribe or supply drugs, remedies or appliances as long as there is no exploitation of the patient. Drugs prescribed by a physician or brought from the market for a patient should explicitly state the proprietary formulae as well as generic name of the drug.
The judgement of the Supreme Court in the matter of Samira Kohli vs Dr. Prabha Manchanda & Anr on 16 January, 2008 also talks about the same as below.

28. But unfortunately not all doctors in government hospitals are paragons of service, nor fortunately, all private hospitals/doctors are commercial minded. There are many a doctor in government hospitals who do not care about patients and unscrupulously insist upon 'unofficial' payment for free treatment or insist upon private consultations.

On the other hand, many private hospitals and Doctors give the best of treatment without exploitation, at a reasonable cost, charging a fee, which is reasonable recompense for the service rendered.

Of course, some doctors, both in private practice or in government service, look at patients not as persons who should be relieved from pain and suffering by prompt and proper treatment at an affordable cost, but as potential income-providers/ customers who can be exploited by prolonged or radical diagnostic and treatment procedures. It is this minority who bring a bad name to the entire profession.”

The time has come for the self-regulation. If the hospital industry does not self regulate, then the govt. will do so, which will be not without adding penal provisions for such practices.  

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