Karnataka Seeks Central Action Over Huge Gap Between Hospital Drug Costs and Patient Bills
Bengaluru: The Karnataka Government has flagged a massive disparity between the landing cost and Maximum Retail Price (MRP) of high-cost drugs and medical consumables supplied to hospitals and has sought Central Government intervention.
In a press note issued by the Office of the Commissioner, Food Safety and Drug Administration on October 1, the government said recent inspections in hospitals treating cancer, where high-cost drugs are used, have revealed alarming pricing anomalies.Investigations by the Karnataka Food Safety and Drug Administration found that pharmaceutical companies are supplying medicines to hospitals at heavily discounted institutional prices, while patients are being billed at or near the printed MRP. This has resulted in markups ranging from 10 times to over 52 times the actual procurement cost.
Based on this, the Minister for Health and Family Welfare, in his letter dated September 23, 2026, has written to the Union Health Minister seeking national action against exorbitant patient billing. During inspections, 253 drugs where extreme pricing anomalies were identified have been listed.
The Karnataka government has asked the Centre to mandate transparency by requiring hospitals to display both landing cost and MRP on patient bills, expand the list of drugs under price control under the Drugs Price Control Order, regulate trade margins on essential high-value medicines and consumables, constitute an inter-ministerial expert group, direct a national data study, amend the DPCO 2013, rationalise trade margins, make cost-to-MRP transparency mandatory, expand the National List of Essential Medicines, treat all forms of back-end consideration as part of acquisition cost, and create an audit and enforcement mechanism.
At present, for scheduled drugs under DPCO, the NPPA fixes a ceiling price with a 16 per cent retailer margin. For non-scheduled drugs, there is no cap on retailer margin and the MRP printed by the manufacturer is the only limit. For medical devices and consumables, there is limited price control and most devices are not under DPCO. For hospital pharmacies, there is no specific regulation mandating pass-through of institutional discounts to patients.
On the direction of the Minister, FDA Drugs Enforcement Officers conducted a special verification drive on September 25 and 26, 2026, at various wholesale premises, hospitals and other establishments in Bengaluru and at district locations across Karnataka.
Preliminary observations indicate substantial differences between landing cost, MRP and actual sale price. The inspections covered more than 768 consumable items and 189 high-cost drugs. The same will be brought to the notice of the Central Government.
The Department will continue the special verification exercise in a phased manner. In the next phase, the focus will be on anti-retroviral drugs, higher-generation and critical antibiotics, medical devices, and hospital consumables having substantial financial implications for patients.The Commissioner, Food and Drug Administration said the government also expects hospitals and pharmaceutical establishments to maintain complete transparency in billing.The press note stated that affordability of essential and life-saving healthcare is a matter of serious public importance, and the Government of Karnataka will take all measures available within its jurisdiction to protect patients from unjustified financial burden.
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