Plea To Regulate Private Hospitals' Medicine Charges : Supreme Court Leaves Issue For States' Policy Decision

In a public interest litigation assailing private hospitals' compulsion of patients/attendants to purchase medicines/implants/medical devices only from pharmacies run or recommended by them, which allegedly charge rates higher than notified market rates, the Supreme Court today directed all State Governments to consider the issue and take policy decisions as they deem fit. 

A bench of Justices Surya Kant and N Kotiswar Singh disposed of the matter, ordering, "We dispose of this petition with direction to all state governments to consider this issue and take appropriate policy decision as they deem fit".

The Court observed that the subjects of public health and sanitation, hospitals and dispensaries fall in List II (state list) and therefore relevant measures can be taken by state governments keeping their local conditions in view. "It may not be advisable for this Court to issue any mandatory directions which may hamper the [...] for hospitals in private sector but at the same time, it is necessary to sensitize state governments re: the alleged problem of unreasonable charges or exploitation of patients in private hospitals", the Court said.

The Court further questioned if it would be prudent for the Union/States to introduce a policy which regulates each and every activity in the private hospitals' space. Stipulating the issues arising for consideration, it was concluded that the policymakers are best equipped to take a holistic view of the matter "and frame guidelines as may be required to ensure that there is no exploitation of the patients and their attendants and at the same time, there is no discouragement and an unreasonable restriction for the private entities to enter the health sector".

Notably, the petitioners had sought a direction to private hospitals not to compel the patients to purchase medicines/devices/implants only from the hospital pharmacies, where they allegedly charge exorbitant rates, as compared to notified market prices of the items. For redressal of the issue, they also sought a direction to the Union/States to frame requisite policy.

The petitioners claimed that medicines, etc. are sold by hospital pharmacies at highly artificial prices as compared to the notified MRP, and that the Union as well as States failed to take requisite regulatory and correctional measures to prevent patients' exploitation.

Going through the record and after hearing submissions, the Court noted that the abovementioned relief was sought in the backdrop of a personal experience of the petitioners. The patient whom the petitioners had admitted had since recovered, but as per them, during the treatment, they had come across an organized system where private hospitals seemed to be compelling patients/attendants to buy medicines etc. from their pharmacies only.

In passing its order, the Court considered the stand of the Union that there is no compulsion for patients to buy medicines etc. from hospitals/their pharmacies, and that of the States/UTs, which questioned the locus of the petitioners and pointed out that Amrit Shops/Jan Aushadhi shops have been set up in government hospitals to facilitate supply of medicines at affordable rates.

The Court also took note of state-run schemes, based on each state's own uniqueness, meant to ensure that drugs, consumables and medical services are made available at affordable prices.

Ultimately, it was opined that provision to medical facilities to all is a right traceable to Article 21 of the Constitution. However, it is the policymakers who are best-equipped to deal with the issue.

Case Title: SIDDHARTH DALMIA AND ANR. Versus UNION OF INDIA AND ORS., W.P.(C) No.337/ 2018

Citation : 2025 LiveLaw (SC) 324

Click here to read the judgment