- 26 Sep 2022
- ICICIdirect Research
CCI investigates overcharging hospital chains
News:
According to media sources, a four-year investigation by India's fair-trade regulator has concluded that some of India's largest hospital chains abused their dominance through exorbitant pricing of medical services and products in contravention of competition laws. Competition Commission of India (CCI) will soon meet to weigh in on the responses by Apollo Hospitals, Max Healthcare, Fortis Healthcare and others, to impose penalties.
View:
A CCI investigation against exorbitant prices of medicines and services fixed by hospitals could potentially rein in the prices of medicines and healthcare equipment. The CCI can impose a penalty of ~ 10% of the average turnover for the past three preceding financial years of an enterprise that has violated competition laws. We believe that further regulatory legislation are likely to be implemented for price capping while we keep track of the CCI verdict and its ramifications.
Impact:
Negative.