The Competition Commission of India (CCI) has closed abuse of dominance proceedings against 12 super-speciality hospitals in the Delhi-NCR region, holding that no contravention of Section 4 of the Competition Act, 2002 was made out in relation to allegations of excessive pricing of medicines, diagnostics, medical devices, consumables and room rent charged from in-patients.
The order was passed by the coram of Chairperson Ravneet Kaur and members Anil Agrawal, Sweta Kakkad and Deepak Anurag on Thursday.
The matter originated from an application filed in 2015 by Vivek Sharma, who alleged that Becton Dickinson India, in coordination with Max Super Speciality Hospital, Patparganj, inflated the maximum retail price (MRP) of disposable syringes sold through the hospital’s in-house pharmacy compared to market rates.
Acting on the complaint, the Commission directed an investigation by the Director General (DG), which found no evidence of collusion between the manufacturer and the hospital. The investigation was thereafter expanded into a broader examination of alleged aftermarket abuse by super-speciality hospitals in Delhi-NCR.
The DG’s probe covered 12 hospitals and reported that they were dominant in their respective markets for in-patient healthcare services. It further recorded alleged abuse of dominance between 2015 and 2018 across five heads, namely room rent, diagnostic tests, medical devices, consumables and medicines.
On this basis, contravention of Section 4 was reported against Max Hospitals in Patparganj, Saket, Shalimar Bagh and Panchsheel Park, BLK-Max Super Speciality Hospital, Fortis Flt Lt Rajan Dhall Hospital, Fortis Escorts Heart Institute, Sir Ganga Ram Hospital, Indraprastha Apollo Hospital, Batra Hospital and St Stephen’s Hospital.
However, the CCI disagreed with the DG’s findings and held that the relevant market could not be confined to individual hospitals. It instead defined the market as provision of in-patient healthcare services by super-speciality hospitals in the Delhi-NCR region. The Commission further observed that medicines, consumables and medical devices formed part of bundled hospital treatment and were not purchased by patients as standalone products.
On allegations of excessive pricing, the Commission applied the two-stage test under competition law, requiring proof that prices were excessive in relation to cost and unfair either in themselves or in comparison with competing services. It held that this standard was not met.
Rejecting comparisons between hospitals and hotels, the CCI noted that hospital rooms were integral to clinical infrastructure supported by medical staff, emergency systems and continuous patient monitoring. It also rejected comparisons between hospital laboratories and standalone diagnostic centres, observing that hospital-based facilities operated round-the-clock and were driven by clinical requirements.
On pricing of medicines and consumables, the Commission held that procurement cost alone could not be the basis for assessing unfair pricing, as it did not account for overheads including storage, logistics, inventory and operational expenses. It further clarified that sale at MRP did not, by itself, constitute a violation of competition law. Noting that the material on record did not establish abuse of dominant position, CCI closed proceedings against all 12 hospitals.
The post CCI closes abuse of dominance cases against 12 super-speciality hospitals in Delhi-NCR appeared first on India Legal.