CCI orders re-evaluation of DG's flawed methodology in hospital abuse case

This is an order by the Competition Commission of India (CCI) in Case No. 77(4) of 2015, concerning allegations of abuse of dominant position by private super-specialty hospitals in Delhi regarding the pricing of healthcare services, medicines, and consumables. It matters to citizens as it addresses potential unfair pricing practices in hospital care and the procedural handling of investigations into such practices.

Who it concerns: The document concerns the Competition Commission of India (CCI), the Informant (Vivek Sharma), Becton Dickinson India (P) Ltd., Max Super Specialty Hospital (Patparganj), and 11 other super-specialty hospitals in Delhi identified as Opposite Parties.

What the document says

• The CCI found that the allegation of collusion between Becton Dickinson and Max Patparganj to print higher MRPs on syringes was not substantiated, and Becton Dickinson was removed as an Opposite Party.
• The Director General (DG) identified 12 super-specialty hospitals in Delhi as dominant in their respective relevant markets (defined as the market for in-patient healthcare services at each specific hospital).
• The DG found that all 12 hospitals contravened Section 4 of the Competition Act, 2002, between 2015 and 2018, citing high profit margins on room rent, medical tests, devices, consumables, and medicines compared to external providers or procurement costs.
• The CCI directed the DG to prepare 12 separate non-confidential and public version reports, treating the matter as 12 separate sub-cases to protect the confidentiality of each hospital's data.
• The CCI directed the 12 Opposite Parties to file audited financial details for the financial years 2014-15, 2015-16, and 2016-17.

Also in the document

• The DG compared hospital prices for medical tests and devices with those of specific diagnostic labs (Dr. Lal Path Labs, Goyal MRI, Focus Imaging, House of Diagnostics) and found hospitals charged higher prices at certain points in time.
• The DG noted that 11 out of 12 hospitals did not allow patients to purchase consumables, medicines, or tests from outside the hospital, making them self-contained markets.
• The CCI noted that the DG had not sufficiently analyzed the 'aftermarket abuse' aspect in the initial report, leading to a supplementary investigation.