Plea Filed in Karnataka High Court Challenging Direction to Hospitals to Disclose Medicine Procurement Prices on Bills
The plea further contends that procurement prices are different depending on suppliers, discounts offered, credit terms and other such commercial factors. Disclosure would bring out confidential commercial agreements entered into by hospitals and lead to unnecessary confusion. Patients will be confused if procurement price varies across hospitals, it adds.
A Division Bench of the Karnataka High Court issued notice to the Central and State governments on a plea challenging a government circular asking hospitals and healthcare institutions to state the base price at which medicines are procured along with the final price charged to patients on bills from November 1.
Filed by the Private Hospitals and Nursing Homes Association, Pristine Hospitals and Research Centre Private Limited and a doctor Dr Halagere Mallikarjuna Prasanna, the petition has been drawn up by advocates Lomesh Kiran N, Twinkle J Chadwa, Prashashti Bhat, Ajay TK and Prajwal V.
“The legislature did not intend hospitals/medical establishments to disclose such information to patients,” it states.
Issuing notice to the Union Ministry of Health and Family Welfare, Karnataka Department of Health and Family Welfare and the Food Safety and Drug Administration Karnataka, Justice CM Poonacha has asked the government to file a reply in four weeks.
Challenging an October 1 circular issued by Commissioner of Food Safety and Drug Administration Karnataka, the petition contends that hospitals and healthcare institutions have been directed to state the actual procurement or landing price of medicines, medical devices and consumables, MRP and the actual price charged on itemised bills issued to patients starting November 1.
“It further directs all hospitals/medical institutions to mandatorily provide/give details of procurement/landing price MRP and selling price... by displaying such notice/notice board at the billing counters/ pharmacy of the hospital/institution,” the circular reads.
The petition states that the circular was issued “ultra vires” of statutory powers vested in the government and argued that no statute governing medicines, medical devices or hospitals empowers the government to pass an order mandating disclosure of procurement prices.
The petition, in essence, says that since medicines come under the Drugs and Cosmetics Act, 1940, the State’s drug licensing authority can only regulate matters under the Act and the Drugs Rules, 1945. Disclosure of procurement costs on bills is not required under these statutes.
It adds that medicines are priced under the Drugs (Prices Control) Order, 2013 framed by the Centre. The statutory body governing medicine pricing is the National Pharmaceutical Pricing Authority (NPPA), it points out.
The pricing regulation does entail pricing parameters such as the MRP, but does not mandate hospitals to disclose the landing price or the base price to patients, the petition states.
The petition also points out that Karnataka has not adopted the Clinical Establishments (Registration and Regulation) Act, 2010 through resolution by states, in exercise of power under Article 252 of the Constitution. Healthcare establishments in Karnataka are governed by the Karnataka Private Medical Establishments Act, 2007.
The petition adds that references to the Legal Metrology Act and hospital billing standards issued by the Bureau of Indian Standards also do not empower the government to mandate disclosure of procurement costs.
The petition states that the price at which medicines are procured vary based on suppliers, discounts, credit terms etc. The plea says, “Compelling hospitals/healthcare institutions to disclose such information would reveal their confidential commercial arrangements with suppliers and it would cause confusion to the patients if procurement price varies from one hospital/institution to another.”
Pointing out that the government gave seven days for hospitals to implement the requirements of the circular, the petition adds that this would entail hospitals modifying their billing software, accounting practices, making changes to procurement records and administrative arrangements.
“Respondents issued the impugned circular without any consultation with hospitals/ nursing homes/pharmacies or other stakeholders. The licensing authority is aware of the commercial realities of hospitals and healthcare institutions,” the petition states.
“Despite such serious repercussions, no attempt was made by the respondent to understand the practical difficulties that would be faced by hospitals and healthcare institutions in giving such information…” it goes on to say.
As per the petition, the Federation of Healthcare Associations of Karnataka had submitted representations to the State government on October 13 and 14 asking it to withdraw the circular. “Further representations were submitted by petitioners/other stakeholders and meetings were also attended. Despite best efforts, the impugned circular was not withdrawn,” the plea states.
