India’s drug prices regulator calls for better oversight of private hospitals

India’s drug pricing authority called for better regulation of the country’s massive private healthcare industry on Friday to ensure government efforts to cut prices benefit patients.

To cut the cost of procedures such as angioplasty and knee surgery, India’s National Pharmaceutical Pricing Authority (NPPA) has dramatically reduced prices of knee implants and cardiac stents in recent months.

The move has been hailed as a major effort by Indian Prime Minister Narendra Modi to make healthcare affordable, but it has been met with stiff resistance from healthcare providers.

Several hospitals across the country have hiked prices of related services which are an essential part of such surgeries – like doctors’ fees and hospital stay costs – to make up for the price caps, according to industry insiders and activists.

These actions risk impeding the efforts of the NPPA, as it considers bringing more medical devices under price control with the aim of making healthcare more accessible in a country where it is still a luxury for many.

“We have to find a way to rationalise the cost of hospital care,” NPPA Chairman Bhupendra Singh told Reuters. “There is no legal framework to regulate hospital charges.”

India spends roughly one percent of its gross domestic product on healthcare – among the lowest in the world – this has resulted in a broken public healthcare system that few trust.

Nearly 70 percent of healthcare delivery is therefore in the hands of private players, from small clinics to large hospital chains. But this private industry is largely unregulated.

The government think-tank NITI Aayog has been pushing for further privatisation of healthcare services, which some experts have expressed concerns over, pushing instead for improvements in the public health infrastructure.

Alexander Thomas, president of the Association Healthcare Providers of India, said hospitals hiking prices after the price control measures are doing so to cover treatment costs.

Most private hospitals, he added, adhere to standards and the AHPI has also been advising its member hospitals to bring in more transparency in the billing process.

Singh said the impact of bringing down the prices of knee implants and stents had been “substantial,” but more needs to be done, such as clear display of treatment costs by hospitals so patients can compare prices across providers.

The health ministry could also look at standardising the cost of certain treatments, so the prices don’t vary across hospitals, Singh said.