Mumbai: After the Centre imposed price caps on key Cancer drugs and growing scrutiny on the cost of consumables, Apollo, Managing Director, Suneetha Reddy pushed back saying the government needs to be sensitised that healthcare isn’t a cost-plus model.
Speaking at the company’s second quarter earnings call on the recent regulatory changes on the healthcare sector, Reddy said “We need to continue to sensitise them (the Government). They are looking at it in terms of the costs of cancer medicines or consumables. But it’s not a cost-plus model. It’s a model where the entire service is delivered and the costs are attached to it.”
“I think product pricing was a proxy for the service earlier, but we hope to move to service pricing, and we continue to stay in touch with the government. The government has represented its case very strongly in the Supreme Court, and I think this engagement will continue. Meanwhile, we will continue to keep our growth and margins strong,” she added.
The remarks come after the National Pharmaceutical Pricing Authority (NPPA) approved a cap on the markup of anti-cancer drugs at 30 per cent of their MRP, last month.
A committee led by the Director General of Health Services (DGHS) notified 137 non-scheduled drugs including next-generation immunotherapies such as pembrolizumab, osimertinib and talquetamab, and several other off-patent therapies for which trade margins will be capped.
The move is set to come into effect from November 9.
When asked how the move will affect Apollo’s Pharmacy business, Obul Reddy, CFO, Apollo HealthCo said, “We are awaiting the revised MRP’s and then analyze the impact. There will be some impact, but we will be quantifying it going forward once it is effective from November 9.”
After drugs, there has also been a growing demand to cap the price of hospital consumables, medical devices.
The issue came into light after Maharashtra FDA Commissioner Tukaram Mundhe flagged markups of as high as 2,800 per cent on certain hospital consumables, such as syringes and catheters.
In a post on social media platform X, Mundhe cited a survey of hospital consumables in Maharashtra that found an IV infusion set with a trade price of ₹11.05 carrying a printed MRP of ₹325, a markup of 2,841 per cent. A syringe procured at ₹6.75 carried an MRP of ₹57.20, while a catheter procured at ₹29.41 carried an MRP of ₹310.
