BENGALURU — Karnataka’s Food and Drug Authority (FDA) has warned that the price of certain drugs at state hospitals can be more than fifty‑two times the cost at which the drugs are landed. The regulator said the gap, measured against the Manufacturer’s Retail Price (MRP), could reach 52.6 times for some medicines, and that 254 drug companies were involved in the price hikes.
Magnitude of the Gap
The FDA’s report, released on 27 September, lists a range of drugs whose hospital prices far exceed the MRP. For example, the price of a single vial of a generic antibiotic could be 52.6 times higher than its landing cost. The regulator said the high mark‑ups could strain public health budgets and limit patient access to essential medicines.
Scope of the Investigation
The agency’s findings cover drugs supplied to Karnataka’s public hospitals over the past year. It identified 254 companies that had set prices significantly above the MRP. The FDA’s analysis was based on price lists from 2025‑26 and hospital procurement records. The regulator urged the state government to intervene and to seek guidance from the central Ministry of Health and Family Welfare.
Regulatory Context
Under the Drugs and Cosmetics Act, 1940, the MRP is the maximum price that can be charged for a drug in India. However, the Act allows for price adjustments for certain categories of drugs, such as those that are imported or require special storage. The FDA’s report notes that the marked‑up prices were not justified by any of the permissible factors.
Government Response
In a statement issued by the Karnataka Department of Health and Family Welfare, officials said the state would review the FDA’s findings and work with the central authorities to ensure that drug prices remain affordable. The department also said it would engage with the 254 companies to understand the basis of their pricing.
Industry Reaction
Several pharmaceutical companies have responded to the FDA’s allegations by saying that the price differences reflect variations in packaging, storage costs and distribution logistics. The companies also said they were willing to cooperate with the regulator’s inquiry.
Implications for Patients
High drug prices can lead to reduced patient compliance and increased out‑of‑pocket expenses. The FDA’s findings suggest that patients in Karnataka’s public hospitals may be paying significantly more than the cost of the drugs at the point of entry into the supply chain.
Next Steps
The FDA has requested that the central Drugs Controller General of India (DCGI) review the price gaps and issue guidelines for price setting in public hospitals. The state government has also asked the National Pharmaceutical Pricing Authority (NPPA) to examine the data and recommend corrective measures.
Broader Context
Price mark‑ups in the pharmaceutical sector have been a long‑standing issue in India. The National Pharmaceutical Pricing Authority has previously set price ceilings for essential drugs, but enforcement has varied across states. Karnataka’s latest findings add to a growing list of states that are scrutinising drug prices.
