Patients admitted to private super-speciality hospitals in Delhi-NCR often end up depending almost entirely on hospital-run pharmacies, laboratories, and consumable services during treatment, the Competition Commission of India (CCI) has observed in a major order linked to pricing practices at hospitals in the region. The regulator, however, closed proceedings against Delhi’s Sir Ganga Ram Hospital after saying the evidence did not conclusively prove abuse of dominant position under competition law, a TOI report stated.
The 32-page order forms part of a wider probe involving 12 leading private hospitals in Delhi NCR. The investigation examined whether admitted patients are effectively pushed to use only hospital-linked pharmacies, diagnostic centres, and medical consumables once hospitalised.
CCI says admitted patients often have little practical choice
The case began with a 2015 complaint related to allegedly inflated syringe prices at a Delhi hospital. During the investigation, the Director General (DG) expanded the probe to examine practices across multiple super-speciality hospitals in the capital.
In its observations, the CCI said admitted patients frequently become dependent on in-house hospital services during treatment.
“In-patients, almost always, resort to usage of the hospital’s in-house pharmacy and laboratories,” the order observed.
The Commission noted that once patients are admitted, they may find it difficult to explore cheaper alternatives outside the hospital ecosystem. This creates what the regulator described as a “locked-in” effect.
Diagnostic tests found costlier than market averages
The DG’s investigation examined pricing trends at Sir Ganga Ram Hospital between 2015 and 2018. According to the order, several diagnostic procedures were priced notably higher than rates charged by standalone diagnostic chains during parts of the review period.
Tests including liver function tests, renal biochemical profiles, reticulocyte counts and blood culture tests reportedly showed substantial mark-ups when compared with average market pricing.
The probe also reviewed imaging procedures such as MRIs, ultrasounds and X-rays. The Commission recorded that certain imaging services were priced over 50% higher than some standalone diagnostic centres during the investigation period.
CCI says pricing comparison alone cannot prove unfair practices
Despite raising concerns over hospital pricing structures, the Commission also questioned parts of the DG’s methodology.
The CCI said procurement costs alone could not be used to determine whether hospitals earned excessive profits because hospitals also bear operational expenses linked to staffing, storage, infrastructure, supply chains and emergency services.
The regulator further observed that hospitals are not legally required to transfer procurement-related gains directly to patients.
Importantly, the Commission noted there was no evidence showing that the hospital sold medicines or consumables above the Maximum Retail Price (MRP) fixed by manufacturers.
The order also acknowledged that hospital-run diagnostic facilities operate round the clock and require higher infrastructure and manpower costs compared to standalone laboratories.
Hospital cites charitable trust model
During the proceedings, Sir Ganga Ram Hospital defended its pricing structure and argued that it operates under a charitable trust model.
The hospital told the Commission that revenue generated from paying patients helps subsidise treatment for economically weaker sections.
It also argued that pricing reflects expenses linked to specialist doctors, advanced medical equipment, emergency preparedness and continuous hospital operations.
Reacting to the order, Dr (Prof) D S Rana, Chairman of the Board of Trustees at Sir Ganga Ram Hospital, said the institution was examining the findings carefully.
“We have received the order and are studying it in detail. Prima facie, it is a welcome step by the CCI. We will get back further after studying the order in detail,” he said.
Proceedings closed despite concerns
While the Commission highlighted concerns around patient dependency on hospital-linked services and pricing patterns, it ultimately decided to close proceedings against the hospital.
According to the order, the material collected during the investigation was not sufficient to conclusively establish abuse of dominant position under the Competition Act.
