Vivek Sharma Vs Sir Ganga Ram Hospital (Competition Commission of India)
The Competition Commission of India examined allegations relating to pricing practices adopted by private super-specialty hospitals in Delhi in proceedings arising from Case No. 77 of 2015. The original information alleged that disposable syringes sold through the in-house pharmacy of a hospital carried higher Maximum Retail Prices (MRPs) than similar products sold in the open market. The Director General (DG) initially investigated alleged contraventions under Sections 3 and 4 of the Competition Act, 2002 and found no evidence of collusion or exclusive agreements between the syringe manufacturer and the hospital. However, the DG concluded that hospitals compelled admitted patients to purchase medicines, consumables, devices, and tests from in-house facilities and earned significant profit margins, amounting to abuse of dominant position.
Following supplementary investigations involving 12 super-specialty hospitals in Delhi, the DG found that hospitals charged higher room rents, medical test charges, medical device prices, and margins on medicines and consumables between 2015 and 2018. The DG treated each hospital as a separate relevant market and held them dominant in their respective markets.
The Commission, however, re-examined the concept of “aftermarket abuse” and considered whether separate primary and secondary markets existed for hospital services and post-admission products and services. It observed that patients generally receive estimated treatment costs before admission and can compare overall treatment expenses across hospitals. The Commission noted that patients are free to choose other hospitals and that switching, though involving procedural and practical difficulties, was not impossible or prohibitively costly in most cases. It therefore concluded that it would not be appropriate to delineate separate primary and aftermarket segments for elective treatment cases and instead defined the relevant market broadly as the “market for provision of healthcare services by super speciality hospitals” in Delhi NCR.
