AUTHOR:
Leela
Tarang Krishna Paladugu,
Assistant Professor, J.G.L.S., LL.M.
Competition Law, King's College London, B.B.A., LL.B. (Hons.),
O.P. Jindal
Global Law School
More about the author: https://jgu.edu.in/jgls/faculty/leela-tarang-krishna-paladugu
Competition Authorities all-across the world,
often distanced themselves from the concept of price regulation, citing their
primary roles as market regulators; watchdogs of anti-competitive practices.
This is, despite the fact that the respective legislations empower them to
regulate price, if said price is either predatory or unfair and excessive or
discriminatory. In May, it was the Competition Commission of India's (CCI) that
distanced itself from regulating a potentially unfair and excessive
price.
In its
latest embargo, CCI had the opportunity to assess and analyse the exorbitant
and excessive prices charged by 12 hospitals in Delhi for providing services to
the patients, however, it refused to enter the matter once again, citing its
preference to be a market regulator.
The
dispute arose when a complaint alleged that Max Super Specialty Hospital, in
collusion with the syringe manufacturers, has inflated the retail prices of
syringes sold to the patients from its in-house pharmacy. The CCI had the
opportunity to scrutinize medical industries' long-standing practice: Charge
higher than market rates for medicines, hospital & diagnostic services,
while the patient is required to be inside the premises of
the hospital, until discharged.
Although
requiring patient receive services from within the hospital is in itself not a
problematic practice, the issue arises when such prices themselves far exceed
the prices that are charged by the generic medicine suppliers and the
diagnostic service providers for the provision of medicines with the exact same
molecules and the exact same medical examination services – How can two
services that are in all-material terms alike, differ so drastically – in
some cases more than 1737% - in cost?
What's
noteworthy is that CCI had flagged this practice in its market study
conducted on pharmaceutical industry back in 2021 – where it noted that in
the medical industry - patients are not the primary decision
makers for the services that are paid by them and is in fact the doctors
and the hospitals inside. It discussed how this “responsibility” can be
misused by charging amounts that are inherently unfair. And when the
option to regulate this practice by analyzing & curbing the
behaviour of charging exorbitant prices because of their position as Hospitals,
CCI chose to not be a price regulator. In so doing, it may have distanced
itself from being a market regulator regards to this industry
practice.
Link
for the blog on Branded generics: https://competingcompetitions.com/essentials/branded-generics/
.jpg)