CCI Closes Case Against Sir Ganga Ram Hospital, Rejects DG's Aftermarket Abuse Findings
The Competition Commission found the Director General's methodology flawed on relevant market, pricing comparisons, and dominant position, closing the decade-long Section 4 inquiry.
The Competition Commission of India, in an order dated 21 May 2026, closed its inquiry against Sir Ganga Ram Hospital, New Delhi, finding no contravention of Section 4 of the Competition Act, 2002. The case, originating from an information filed in 2015 over alleged price manipulation of disposable syringes, had expanded through a supplementary investigation into a broad examination of whether twelve private super-specialty hospitals in Delhi abused their dominant positions over admitted in-patients. After scrutinising the Director General's supplementary investigation report and hearing the parties across multiple dates in 2025, the Commission concluded that neither of the two tests for abuse of dominant position — as laid down in United Brands — was established on any count against the hospital.
How a Syringe Complaint Became a Twelve-Hospital Inquiry
Shri Vivek Sharma filed information under Section 19(1)(a) of the Act in 2015, alleging that Becton Dickinson India (P) Ltd., a manufacturer of disposable syringes, colluded with Max Super Specialty Hospital, Patparganj, to print a higher Maximum Retail Price on syringes sold at the hospital's in-house pharmacy compared to the open market. The Commission formed a prima facie view of a Section 4 contravention and directed the Director General to investigate under Section 26(1) on 17 November 2015.
The DG's main investigation report found no exclusive agreement between Becton Dickinson and Max Patparganj and no contravention of Section 3(3). The Commission confirmed that finding in its order of 31 August 2018. However, the Commission noted that the DG had flagged conduct akin to “aftermarket abuse” without analysing it in detail, and directed a supplementary investigation. The scope was widened to cover all aftermarket healthcare products and services provided by super-specialty hospitals across Delhi to their in-patients, with Delhi as the relevant geographic market.
The DG's supplementary investigation report, submitted in confidential version on 24 December 2021, covered twelve super-specialty hospitals. It defined 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. Each hospital was found dominant in its own market and each was found to have contravened Section 4 between 2015 and 2018 across five parameters: room rent, medical tests, medical devices, consumables, and medicines.
Becton Dickinson India (P) Ltd. was deleted from the array of opposite parties in January 2022, as no contravention had been found against it. The eleven other hospitals were impleaded alongside Max Patparganj. After extensive confidentiality proceedings, the Commission directed the DG to prepare twelve separate unredacted supplementary investigation reports, which were submitted on 18 September 2024. The Commission formally segregated Case No. 77 of 2015 into twelve sub-cases. The present order, Case No. 77(9) of 2015, concerns Sir Ganga Ram Hospital alone.
Sir Ganga Ram Hospital's Case Before the Commission
Sir Ganga Ram Hospital contested the inquiry on multiple grounds. It argued that the DG had included it without conducting any prima facie investigation specific to it under Section 26, and that neither the order of 31 August 2018 nor the DG's report disclosed any prima facie case against it.
On the relevant market, the hospital submitted that defining the market as “provision of healthcare services/facilities for in-patients admitted to Ganga Ram Hospital in Delhi” was so narrow as to make the hospital a market unto itself, leaving no room for a meaningful dominance assessment under the factors listed in Section 19(4) of the Act.
On pricing, the hospital challenged each of the DG's five parameters. It argued that comparing room rent with nearby three-star and four-star hotels was fallacious because hospital room charges cover resident doctors, nurses, paramedical staff, therapeutic diet, disinfection, and round-the-clock infrastructure — costs entirely absent from hotel tariffs. On medical tests, it contended that the DG had not accounted for the hospital's 24-hour operational requirement, the grade of machinery, or the qualifications of staff, when comparing its rates with standalone diagnostic laboratories. On medical devices, it stated that it had not charged above NPPA-fixed prices for knee and hip implants. On consumables and medicines, it pointed out that all items were sold at or below MRP, and that the DG had incorrectly assumed all procured medicines were for sale, ignoring quantities used for emergency patients, ICU patients, outpatient economically weaker section care, free camps, and staff.
The Commission's Analysis: Relevant Market and the Aftermarket Question
The Commission examined whether two separate relevant product markets existed — a primary market for healthcare services by private super-specialty hospitals, and a secondary aftermarket for post-operative treatment of in-patients including consumables, medicines, medical equipment, and tests — or whether these formed a unified systems market.
The Commission applied three conditions drawn from decisional practice: whether patients engage in whole-life costing; whether reputation effects deter the provider from setting competitive prices in the secondary product; and whether the cost of switching primary products is low enough to club the two markets.
On whole-life costing, the Commission found that patients seeking elective treatment typically ascertain the cost of the procedure and associated expenses before admission. Hospitals provide an estimated cost covering the procedure, drugs, consumables, and room rent. Patients retain the freedom to accept or reject the estimate, seek a second opinion, or choose another hospital before any commitment is made. The Commission concluded that patients have a reasonable degree of information to undertake a comparative analysis of total treatment expenses and take an informed decision.
On reputation effects, the Commission found that for well-established hospitals like Sir Ganga Ram Hospital, factors such as high demand, brand image, perception of quality, and the availability of expert doctors suggest that the risk of losing market share in the primary market may not effectively constrain the hospital from acting independently of competitive forces in secondary markets such as in-house diagnostics, medicines, and consumables.
On lock-in, the Commission noted from the supplementary investigation report that while there may be no specific embargo, hospitals encourage the use of consumables, medical devices, medicines, and test results from in-house pharmacies and laboratories. The Commission acknowledged that once admitted, patients face practical constraints in sourcing products externally.
Despite these observations, the Commission's overall assessment was that the DG's evidence did not establish the conditions for a separate aftermarket in a manner that would sustain a finding of abuse.
Why Each of the DG's Five Parameters Failed
On room rent, the Commission found that comparing hospital room charges with three-star and four-star hotel rates was not an appropriate benchmark. Hospital room charges encompass clinical infrastructure, nursing, paramedical staff, and continuous medical monitoring, which are absent from hotel accommodation. The Commission held that the DG's finding on room rent was not sustainable.
On medical tests, the Commission found that the DG's comparison of the hospital's rates for thirteen routine tests with four standalone diagnostic laboratories did not account for the hospital's obligation to provide 24-hour testing with available staff and infrastructure, and to ensure faster turnaround times. The Commission held that the finding of unfair pricing on medical tests was not established.
On medical devices, the Commission examined the DG's comparison of prices for stents, knee implants, hip implants, X-rays, MRI, and ultrasound procedures. For X-ray and ultrasound, the Commission found that comparison with only one standalone laboratory each was inadequate, and that charges would qualify as unfair only where significantly higher than those charged by other hospitals for comparable services. The Commission held that the DG's finding on medical devices was not sustainable.
On consumables and medicines, the Commission found that comparing procurement price with selling price to calculate profit margin was not a relevant or appropriate methodology, because procurement price does not cover overhead expenses including storage, supply chain management, operational costs, and inventory management. The Commission held that prices for consumables and medicines ought to have been compared with prices at other super-specialty hospitals or nearby pharmacies, not with procurement prices. The Commission also noted that there was no finding in the supplementary investigation report that any consumable or medicine was sold above its MRP. The sample size taken by the DG was described as quite limited. The Commission held that the finding of excessive and unfair pricing on consumables and medicines was not established.
The United Brands Test and the Final Finding
The Commission applied the two-limb test from United Brands for establishing unfair pricing as an abuse of dominant position. It concluded that neither limb was established on any count from the evidence gathered by the DG in the supplementary investigation.
The Commission held that “no case of abuse of dominant position in contravention of Section 4 of the Act can be made out against the OP.”
Order
The Commission directed that Case No. 77(9) of 2015 be closed. All pending interlocutory applications, if any, were disposed of. Confidentiality was granted 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, read with 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 is to be treated as confidential. The Secretary was directed to communicate a certified copy of the order to Sir Ganga Ram Hospital.
The order was signed by Chairperson Ms. Ravneet Kaur and Members Mr. Anil Agrawal, Ms. Sweta Kakkad, and Mr. Deepak Anurag at New Delhi on 21 May 2026. Sir Ganga Ram Hospital was represented before the Commission by Shri Manu Bajaj, Advocate.