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Synopsis

The Supreme Court recently observed that while it may not issue mandatory directions that could hamper the growth of private hospitals, there is a need to sensitise State Governments about the problem of unreasonable charges and exploitation of patients in such establishments.

Dealing with a PIL on the issue of unreasonable charges of medicines raised by the private hospitals, a bench of Justices Surya Kant and N Kotiswar Singh issued a direction to all the State Governments to consider this issue and take appropriate policy decisions as they may deem fit.

"There can be no doubt that the provision of medical facilities to one and all is an essential component of the right to life guaranteed under Article 21 of the Constitution. The States have, therefore, committed themselves to provide medical facilities to the people in furtherance of the duty and vision enshrined in Part IV of the Constitution," the bench said. 

The court, however, clarified that it had not expressed any opinion on the merits of the case. 

"We have only briefly explained the plight of the public at large, who comprise a huge class of consumers of health services, alongwith the constitutional framework within which such policy decisions are required to be taken to redress their grievances," the bench said.   

In the plea filed by Siddharth Dalmia and another, the court examined the issues whether the affairs of the private hospitals, nursing homes, medical institutes, etc with reference to the fixation of prices of drugs, equipment, or other accessories sold from the pharmacies run by them and/or with whom they have some commercial agreement, can be regulated through administrative or legislative measures, if so, what can be the extent of such measures and what is the mechanism to enforce such measures and to whom such task can be entrusted.

The bench pointed out it was on record that in proportion to the population of the country, the States have not been able to develop the requisite medical infrastructure to cater to the needs of all kinds of patients. 

"The States have, therefore, facilitated and promoted private entities to come forward in the medical field as a result of which, numerous renowned private hospitals, well-known for their specialties, and which are comparable to any other hospital around the globe, have been set up throughout the country. It, therefore, must be acknowledged that not only the people, even the States look towards these private entities to provide basic and specialized medical facilities to the public at large," the court noted.   

In this backdrop, the court asked if it would be prudent for the Union of India or the States to introduce a policy that regulates each and every activity within the compound of these private hospitals. Will such a policy discourage persons to come forward and invest in the health industry throughout the country? Most importantly, why should the States not adopt such economic policies whereunder they ensure dedicated apportionments towards the development of basic infrastructure, including institutions for health services; and till such time the States are able to do so, whether stringent measures that would stall private entities from coming forward, should be allowed to be introduced?

"All these issues are undoubtedly of paramount public importance. It, however, seems to us that such issues primarily involve policy decisions, for which the policy-makers are the best equipped to take a holistic view and formulate the guidelines as may be required, to safeguard the patients or their attendants from exploitation while simultaneously, ensuring that there is no discouragement and unreasonable restriction on private entities from entering the health sector," the bench said.

The court also pointed out that the subject of public health and sanitation, hospitals, and dispensaries falls under List-II – the State List – and, therefore, any such measure must be taken by the State Governments, keeping their local conditions in mind.    

The petitioners sought to restrain private hospitals from compelling the patients to purchase medicines/devices/implants/consumables from the hospital pharmacies only, where they allegedly charge exorbitant rates, as compared to the notified market prices of those items.  

During the treatment of his wife for cancer, the main petitioner claimed to have realised that there is an organised system adopted by the private hospitals, nursing homes, health care institutions, etc to fleece patients by compelling them and their attendants to buy medicines only from the pharmacies run by such hospitals or with whom they have some form of collaboration. He contended that the medicines/treatments etc are sold by these pharmacies at highly inflated artificial prices, as compared to the MRP notified by the Competent Authority.

Moreover, he alleged that the Union of India and the States have failed to take regulatory and correctional measures as a result of which, the patients are being exploited throughout the country.   

He sought a direction to the private hospitals not to compel the patients to buy the medicines, etc from the pharmacies recommended by them.   

He also sought formulation of a policy to prevent this form of exploitation, which, if allowed to continue, would amount to the deprivation of their right to a healthy life guaranteed within the framework of Article 21 of the Constitution. The petitioners’ case further stated that the States are obligated, in terms of Articles 38, 39 and 47 of our Constitution, where the Directive Principles of State Policy expect them to come forward and introduce such regulatory measures as may be required to control this menace.   

In its affidavit, the Union government stated the National Council for Clinical Establishments has issued minimum standards for the hospitals, including for pharmaceutical services, as per which, the availability of drugs, consumables, and medical services are ensured in hospitals. It further took a stand that there is no compulsion for the patients or their attendants to buy medicines from the hospital’s own pharmacy.   

The States, on their part, pointed out that Jan Aushadhi Kendras and Amrit Drug Stores have been set up in Government hospitals, which are being run by public sector undertakings, where all medicines are provided at subsidized rates. 

They relied upon the Drug Price Control Order, 2013, issued by the Central Government under the Essential Commodities Act, 1955 whereunder the prices of the essential drugs are fixed to ensure their availability at a reasonable rate. Like the Union of India, most of the States have also referred to the National Pharmaceutical Pricing Authority (NPPA), under the Ministry of Chemicals and Fertilizers, which, according to them, has the mandate to fix/revise the prices of controlled bulk drugs and formulations to enforce prices and availability of the medicines in the country.  

"We may hasten to add that most of the States have also highlighted State-run-schemes, which are meant to ensure the availability of drugs, consumables, and medical services to the patients and their attendants at affordable prices. Some States have introduced cashless treatment schemes, especially to provide medical facilities to specially-abled persons, widows, and BPL card-holders," the bench said, disposing of the writ petition.

Case Title: Siddharth Dalmia & Anr Vs Union of India & Ors