India healthcare sector faces scrutiny over pricing and private sector expansion

The Association of Healthcare Providers of India (AHPI) has called for a fact-based approach regarding reports of price discrepancies between medical product procurement costs and patient billing. Dr. Girdhar Gyani, Director General of AHPI, clarified that hospitals do not determine the Maximum Retail Price (MRP) of medicines or medical products; rather, the MRP is set by manufacturers and regulated by the National Pharmaceutical Pricing Authority (NPPA).

This discussion occurs amid a period of rapid expansion in India’s private healthcare sector. Significant capital is flowing into the industry, with Manipal Health recently launching a $1 billion IPO and over $30 billion in mergers, acquisitions, and private equity deals recorded between 2022 and 2024. While this investment has increased hospital beds and diagnostic networks, it has also highlighted a significant cost gap between public and private care.

Data indicates that private hospital expenses are substantially higher than government institutions. For instance, average out-of-pocket expenses for hospitalization in private facilities are approximately 7.6 times higher than in government hospitals. Similar disparities are noted in maternity care and treatments for chronic conditions like cancer and kidney disease, where private costs can be five to ten times higher than public alternatives.