AHPI Seeks Balanced Drug Pricing, Opposes Uniform 16% Margin on Medicines

The Association of Healthcare Providers of India (AHPI) has called for a balanced and evidence-based approach to the pricing of medicines and medical consumables, cautioning against applying a uniform 16% margin across all drugs.

The healthcare providers’ body’s statement follows recent observations by the Supreme Court regarding steep markups on cancer medicines by hospitals and its suggestion of a standard 16% margin on medicines.

While AHPI acknowledged that a uniform margin could improve transparency and affordability, it said a single pricing formula may not adequately account for differences in the supply chains and operational requirements of various medicines.

According to the association, fast-moving chronic medicines, low-volume lifesaving drugs, cold-chain products and high-cost specialty medicines have significantly different storage, distribution and inventory requirements. Applying the same margin to all such products, it said, could make some medicines commercially difficult to stock.

AHPI also highlighted the role of medicines and consumables within the broader healthcare delivery system. It said hospitals often provide treatment through bundled packages under private insurance and government health schemes, where medicines and consumables are not separately charged to patients.

For patients receiving care outside such arrangements, AHPI said hospitals and retailers generally dispense medicines at the Maximum Retail Price (MRP) printed by manufacturers, subject to applicable regulations. The association noted that the MRP is determined by manufacturers rather than independently fixed by hospitals.

Dr Girdhar Gyani, Director General of AHPI, said hospitals provide more than medicines, covering round-the-clock clinical services such as drug stocking, preparation, quality checks and safe administration. He said the pricing of medicines and consumables therefore needs to be considered alongside the overall responsibilities and costs involved in delivering safe and effective patient care.

AHPI has consequently called for a pricing framework that considers the varied characteristics of medicines while balancing affordability, transparency, availability and the operational requirements of healthcare providers.

Source: Economic Times