Some hospitals in the National Capital Region (NCR) prescribed branded medicines that were outside the regulator’s purview and inflated their prices several times in order to boost profit, the National Pharmaceutical Pricing Authority said. Four hospitals in the NCR marked up the retail prices of such medicines as much as 12-fold from the rates at which they were purchased, NPPA said in a report.These “non-scheduled” drugs made up a little over a quarter of the total bill to patients at the hospitals, while medicines under price control (scheduled formulations) contributed 4%, according to the findings. Hospital charges for diagnostic services, which accounted for 15% of the bill – the second-highest component – were found to be “invariably higher” than those provided at private centres, according to NPPA.The hospitals have been the “major beneficiaries” of profit in all these cases because they inflated the maximum retail prices of the products, NPPA said.NPPA chairman Bhupendra Singh could not be reached for comment.While Fortis Memorial Research Institute in Gurgaon was referred to indirectly in the report, NPPA declined to reveal the other hospitals, which provided billing information on condition of confidentiality.“While NLEM (National List of Essential Medicines) covers some essential medicines, many other formulations may be required for treatment as per standard clinical protocols and need to be prescribed accordingly. Fortis Healthcare does not charge any drug or consumables above the printed MRP and have always abided to Drug Price Control Order(s),” a Fortis Healthcare spokesperson said.The MRP of some scheduled formulations were marked up 116%-357% from the hospital’s procurement price, while non-scheduled formulations were inflated by 158%-1,192%.“It is amply clear that for claiming higher margins, doctors-hospitals preferred prescribing and dispensing nonscheduled branded medicines instead of scheduled medicines while scheduled medicines under NLEM are supposed to cover all essential medicines,” NPPA stated in its notification on Tuesday.“Because non-scheduled drugs make up the highest share of the bills, hospitals are maximising their profits through unethical margins,” said Malini Aisola of patient activist group All India Drug Action Network.An industry executive said allegations that hospitals are profiteering are unfounded. “If you look at the bottom lines of most listed players, most of them are making losses or have single digit profitability,” the person told ET.The NPPA sought billing details from the hospitals after allegations of overcharging and medical negligence surfaced following the death of a seven-yearold dengue patient in September.The pharmaceutical industry is “forced” to print higher maximum retail prices in order to get bulk supply orders from these hospitals, NPPA said. In most cases, the hospital’s purchase prices of medicines are lower than those offered by manufacturers to stockists in retail chains, it added.“This is a clear case of market distortion where manufacturers, after accounting for their profits, print inflated MRPs to meet out the demands of a distorted trade channel… and patients have to incur huge out-of-pocket expenditure in hospitalisation cases,” stated NPPA.