Vivek Sharma Vs Max Smart Super Specialty Hospital (Competition Commission of India)
The Competition Commission of India (CCI) examined allegations that disposable syringes sold through the in-house pharmacy of a private super-specialty hospital carried a higher Maximum Retail Price (MRP) than identical products available in the open market. The original complaint alleged collusion between the hospital and the syringe manufacturer in violation of Sections 3 and 4 of the Competition Act, 2002. After investigation, the Director General (DG) found no evidence of collusion or exclusive arrangements between the hospital and the syringe manufacturer. The CCI accepted this finding and held that there was no contravention of Section 3(3) of the Act.
However, the investigation expanded to examine whether private super-specialty hospitals in Delhi abused their dominant position by compelling admitted patients to purchase medicines, consumables, medical devices, and diagnostic services from in-house facilities at allegedly excessive prices. The DG identified 12 super-specialty hospitals in Delhi and treated each hospital as a separate relevant market. The DG concluded that the hospitals were dominant in their respective markets and had engaged in abusive conduct between 2015 and 2018 through higher room rents, diagnostic charges, prices of medical devices, consumables, and medicines.
The DG’s findings included comparisons of hospital room rents with nearby hotels and hospitals, diagnostic test prices with standalone laboratories, and procurement prices of medicines and consumables with the hospitals’ selling prices. According to the DG, significant profit margins existed on several consumables and medicines, and certain diagnostic tests and procedures were priced substantially higher than comparable services provided by independent laboratories.
