Hospital chains abused their dominance to charge exorbitant prices

An investigation by the Competition Commission of India (CCI) has found that some of India’s largest hospital chains charged exorbitant prices for services and products, abusing their dominance in the market, according to a report by Moneycontrol.

India’s fair-trade regulator will soon meet to analyse responses of chains like Apollo Hospitals, Max Healthcare, Fortis Healthcare, Batra Hospital & Medical Research, Sri Ganga Ram Hospital, and St Stephen’s Hospital. It will then impose penalties based on the responses.

MC added that the commission might slap steep penalties. The penalty can be up to 10 per cent of the hospital chains’ average turnover in the last three years. Apollo’s average turnover was Rs 12,206 crore. Fortis Hospitals’ average turnover for the last three years was Rs 4,834 crore.

The higher pricing was charged for renting rooms, medicines, medical tests, medical devices, and consumables. In some hospitals, the report added that the room rents exceeded the charges of 4-star hotels.

CCI has been examining the pharma sector in India for the past few years. In April 2020, it cautioned businesses against taking advantage of the Covid-19 pandemic and violating competition laws.

The investigation and penalties, the report added, may help in bringing the prices of medicines and equipment down. They may also bring transparency to the healthcare business.

The hospitals were chosen based on the number of doctors, paramedics, beds, and turnover. These hospitals also do not allow patients to buy consumables, tests, devices, and medicines from outside.

The CCI sent the investigation reports to the hospitals on July 12, 2022, the report added. The fees charged by these hospitals for tests like X-rays, MRI, and ultrasound and consumables like syringes and blades were found to be higher than other makers. Business Standard