CCI Closes Case Against BLK Max Hospital, Finds No Abuse of Dominant Position in Aftermarket for In-Patients

The Competition Commission of India has closed a decade-long inquiry against BLK Max Super Specialty Hospital, finding the DG's evidence insufficient to establish unfair pricing under Section 4 of the Competition Act.

The Competition Commission of India, by an order dated 21 May 2026, closed the proceedings against BLK Max Super Specialty Hospital, New Delhi in Case No. 77(4) of 2015. The Commission, comprising Chairperson Ms. Ravneet Kaur and Members Mr. Anil Agrawal, Ms. Sweta Kakkad, and Mr. Deepak Anurag, found that neither limb of the two-stage test for excessive and unfair pricing — as drawn from United Brands v. Commission of the European Communities — was established on any count from the evidence gathered by the Director General. The case, which originated in 2015 from a complaint about inflated MRP on disposable syringes, had expanded through two rounds of DG investigation into a wide-ranging inquiry covering room rents, medical tests, medical devices, consumables, and medicines charged to admitted in-patients across twelve Delhi super-specialty hospitals.

How a Syringe Complaint Became a Twelve-Hospital Inquiry

The information was filed in 2015 by Shri Vivek Sharma under Section 19(1)(a) of the Competition Act, 2002, against Becton Dickinson India (P) Ltd. and Max Super Specialty Hospital, Patparganj. The allegation was specific: Becton Dickinson had, in collusion with Max Patparganj, printed a higher MRP on disposable syringes sold at the hospital's in-house pharmacy compared to the same product sold in the open market.

The Commission formed a prima facie view of contravention of Section 4 and directed the DG to investigate. The DG's first investigation report, received and considered by the Commission, cleared both parties of any contravention under Section 3(3). No exclusive supply agreement between Becton Dickinson and Max Patparganj was found; syringes were supplied through two separate distributors.

However, the DG's first report also found that Max Patparganj was earning large profit margins on syringe sales and was compelling in-patients to purchase products only from its in-house pharmacy. The DG concluded this amounted to abuse of dominant position under Section 4(2)(a)(ii). The Commission, in its order dated 31 August 2018, noted that the DG had referenced conduct “akin to aftermarket abuse” without analysing it in depth, and directed a supplementary investigation under Regulation 20(6) of the erstwhile General Regulations, 2009.

The supplementary investigation, submitted in confidential version on 24 December 2021, covered twelve super-specialty hospitals in Delhi. Becton Dickinson was deleted from the array of opposite parties. The eleven other hospitals were impleaded alongside Max Patparganj. The Commission directed that the matter be treated as twelve separate sub-cases, with separate investigation reports, separate hearings, and separate orders for each hospital. The present order is the sub-case numbered 77(4) of 2015, pertaining to BLK Max Super Specialty Hospital.

What the DG Found Against BLK Max

The DG's supplementary investigation framed five issues. On the question of enterprise status, the DG found that BLK Max, like the other eleven hospitals, was an enterprise under Section 2(h) of the Act because it provided medical services in exchange for monetary consideration.

On relevant market, the DG departed from a geography-based definition and instead delineated twelve separate relevant markets — one per hospital — as the “market for provision of healthcare services/facilities for in-patients admitted to the respective private super specialty hospital” in Delhi. The DG's reasoning was that eleven of the twelve hospitals did not allow in-patients to purchase consumables, medicines, medical devices, or medical tests from outside the hospital, making each hospital self-contained and independent from the others.

On dominance, the DG found each hospital dominant in its own delineated market, since no other hospital exercised any influence over its management or policies.

On contravention, the DG found all twelve hospitals in violation of Section 4 of the Act from 2015 to 2018 across five parameters. For BLK Max, the findings covered: room rents charged at rates higher than nearby three-star and four-star hotels; prices for thirteen routine medical tests higher than four standalone diagnostic labs; prices for certain medical devices including stents, knee implants, hip implants, and imaging procedures showing an increasing trend; significant profit margins on twenty specific consumables and twenty top consumables; and significant profit margins on nineteen specific medicines and twenty top medicines.

BLK Max's Case Before the Commission

BLK Max, represented by Senior Advocate Shri Jayant Mehta along with a team of advocates, raised objections across the entire analytical framework of the supplementary investigation report.

On relevant market, the hospital argued that the DG had delineated an aftermarket without first identifying and analysing the primary market. It relied on the Commission's own decision in Shamsher Kataria v. Honda Siel and Ors. to argue that an aftermarket does not exist where customers can switch to another competing primary product. The hospital submitted that patients seeking elective treatment are given an all-inclusive cost estimate before admission, are free to seek treatment elsewhere, and are under no compulsion to proceed. Several patients, it was stated, do not continue treatment after receiving the estimate.

On pricing methodology, the hospital argued that the DG's comparison of hospital room rents with hotel tariffs was misconceived, since hospital rooms are equipped with clinical infrastructure, trained staff, and emergency response mechanisms that hotels do not provide. Similarly, comparing hospital diagnostic charges with standalone labs ignored the hospital's 24-hour operational requirement, faster turnaround times, and the presence of treating doctors in the lab during imaging procedures.

On consumables and medicines, the hospital pointed out that all products were sold within the MRP fixed by manufacturers, and that the DG's methodology of comparing procurement price with selling price to derive a profit margin ignored overhead costs such as storage, supply chain management, inventory management, and disposal costs.

The hospital also raised a jurisdictional argument: that pricing regulation of hospital services falls within the exclusive domain of state governments under List II of the Seventh Schedule of the Constitution, and that the Commission is not a price regulator. It cited the Supreme Court's judgment dated 4 March 2025 in Siddharth Dalmia and Another v. Union of India and Others, where the Court noted that regulation of hospital pricing primarily involves policy decisions for which policy-makers are best equipped.

On the legal standard for excessive pricing, the hospital argued that Section 4(2)(a)(ii) requires a price to be shown to be “unfair”, which is a higher threshold than merely excessive. It submitted that the DG had conflated excessiveness with unfairness without applying the two-stage test from United Brands.

How the Commission Analysed the Aftermarket Question

The Commission accepted that BLK Max is an enterprise under Section 2(h) and proceeded to examine whether a separate aftermarket existed for in-patient services.

The Commission identified three conditions relevant to determining whether an aftermarket exists separately from the primary market: whether customers engage in whole-life costing; whether reputation effects deter the provider from setting supra-competitive prices for the secondary product; and whether the cost of switching from the primary product is low enough to treat the primary and secondary products as a unified systems market.

On the facts, the Commission noted that patients opting for elective treatment typically ascertain the cost of the procedure and associated expenses before admission. The Commission examined the cost estimate documents submitted by BLK Max and found that they provided a break-up of charges covering the procedure, drugs, medical consumables, and room rent. In most instances, the actual bill was close to the estimate. The Commission accepted that patients are given an all-inclusive estimated cost, are free to reject it, seek a second opinion, or choose another hospital, and that several patients do not proceed after receiving the estimate.

On this basis, the Commission concluded that patients seeking elective treatment at BLK Max do engage in whole-life costing before admission, and that the conditions for a separate aftermarket were not established on the facts of this case.

The Commission's Assessment of Each Pricing Category

On room rents, the Commission found the DG's comparison with three-star and four-star hotels to be an inadequate benchmark. Hospital rooms serve clinical purposes and are equipped with specialised infrastructure, trained medical staff, and emergency response mechanisms that are absent in hotel accommodations. The Commission held that the comparison was not appropriate for establishing unfair pricing.

On medical tests, the Commission found that the DG's comparison of hospital charges with standalone diagnostic labs did not account for the hospital's higher cost of operations, including 24-hour availability of staff and infrastructure and faster turnaround times. The Commission also found that the comparison was limited to a single standalone lab for X-ray and ultrasound procedures, which it considered inadequate. It held that charges for X-ray and ultrasound procedures would qualify as unfair only where they are significantly higher than those charged by other hospitals for comparable services — a comparison the DG had not made.

On medical devices, the Commission found the DG's finding of unfair pricing not sustainable, for reasons consistent with its analysis of the other categories.

On consumables and medicines, the Commission found the DG's methodology of comparing procurement price with selling price to be neither relevant nor appropriate, since procurement price does not cover overhead expenses including storage, supply chain management, operational costs, and inventory management. The Commission also noted that there was no finding in the supplementary investigation report that BLK Max had charged any patient more than the MRP fixed by the manufacturer for any consumable or medicine. It further noted that no law obliges a hospital to pass on profits from product sales to patients, and that the sample size taken by the DG was quite limited.

Across all five parameters, the Commission concluded that neither the excessive limb nor the unfair limb of the United Brands test was established from the evidence gathered by the DG.

Order

The Commission held that no case of abuse of dominant position in contravention of Section 4 of the Act could be made out against BLK Max Super Specialty Hospital on the material and evidence available on record. The matter was directed to be closed. All pending interlocutory applications, if any, were disposed of.

On confidentiality, the Commission granted confidential treatment to documents, data, and information filed by the hospital under Regulation 35 of the General Regulations, 2009 (as amended), in terms of Regulation 36 of the General Regulations 2024, subject to Section 57 of the Act, for a period of three years from the date of the order. The Commission clarified that nothing disclosed in the order itself would be treated as confidential.

The Secretary was directed to communicate a certified copy of the order to BLK Max Super Specialty Hospital.