A) ABSTRACT / HEADNOTE

Siddharth Dalmia & Anr. v. Union of India & Ors., [2025] 4 S.C.R. 197 : 2025 INSC 351 addresses whether private hospitals can be administratively or legislatively regulated so as to prevent them from compelling patients to purchase medicines, implants, devices or consumables exclusively from hospital-linked pharmacies at allegedly inflated prices.

The petition, filed under Article 32 as a public interest writ, arose from the petitioners’ personal experience of alleged overcharging during cancer treatment of the petitioner’s relative. The Court recognises the constitutional imperative under Article 21 (right to life) and the Directive Principles such as Articles 38, 39 and 47, which urge state action to secure health and welfare, while emphasising the federal distribution of powers: public health and hospitals fall under the State List (List II).

The Court refrains from issuing sweeping mandatory directions that might chill private investment in healthcare. Instead, it frames the controversy as essentially a policy matter best addressed by State Governments and directs all States to consider appropriate policy responses to curb unreasonable charges and exploitation in private hospitals.

The judgment therefore disposes the petition with a call for policy-level action, while expressly reserving opinion on the merits and noting existing regulatory mechanisms (e.g., Drug Price Control Order, 2013; NPPA; National Council for Clinical Establishments standards).

Keywords: public interest, private hospitals, consumer protection, Article 21, State List, health policy.

B) CASE DETAILS 

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The petition raises systemic concerns about the nexus between private hospitals and in-house or affiliated pharmacies which allegedly results in compelled purchases and overcharging for medicines, implants and consumables. The petitioners presented a real-life narrative prolonged oncological treatment of a family member and alleged an “organized system” enabling such exploitation.

The Union and several States responded by pointing to existing institutional mechanisms: Jan Aushadhi, Amrit Drug Stores, the Drug Price Control Order, 2013, and the National Pharmaceutical Pricing Authority (NPPA), alongside State welfare schemes and cashless treatment programmes. The Union additionally cited the National Council for Clinical Establishments minimum standards that cover pharmaceutical services in hospitals.

The Court frames three core legal-political questions:

(i) whether pricing and sale practices within private hospitals’ premises may be regulated by administrative or legislative instruments;

(ii) the permissible scope of such regulation; and

(iii) appropriate enforcement mechanisms and institutional responsibility.

Against the constitutional canvas the Court recognises that access to medical care is an essential facet of Article 21, but also emphasises federal competencies: health, hospitals and sanitation are squarely within the State List. The background therefore lays tension between consumer-protection and patient welfare against the economic policy of encouraging private healthcare investment to meet infrastructure deficits.

D) FACTS OF THE CASE

The petitioners are private individuals who filed the petition in public interest after a relative (mother of petitioner No.1) underwent extensive cancer treatment beginning July 2017 (surgery, multiple chemotherapies, radiotherapy and adjuvant therapies). During treatment the petitioners observed and alleged that private hospitals compelled purchase of medicines and medical consumables exclusively from hospital pharmacies or associated vendors and that the prices charged were significantly higher than notified market rates or MRP.

The petitioners assert systemic failure by the Union and States to regulate such practices, producing consumer exploitation across the country. Notices were issued (14.05.2018) and numerous States and Union Territories filed counter affidavits, with many emphasising existing public schemes, subsidised retail outlets (Jan Aushadhi, Amrit Drug Stores), pricing regulation under Drug Price Control Order, 2013, and role of NPPA. The Union referred to minimum standards issued by the National Council for Clinical Establishments and denied any compulsion.

Several States also pointed to cashless schemes and special programmes for vulnerable groups. The petition remained contested on locus and relief sought; the Court heard submissions and examined constitutional and policy dimensions.

E) LEGAL ISSUES RAISED

i. Can the sale and pricing practices of drugs, devices and consumables within private hospitals’ premises be regulated through administrative or legislative measures?
ii. If regulation is permissible, what is the permissible constitutional and legal extent of such measures without impeding private investment in health services?
iii. What enforcement mechanism(s) and institutional authorities are appropriate to monitor and remedy forced procurement and alleged overcharging within private healthcare establishments?
iv. To what extent do existing statutes and policy instruments (e.g., Drug Price Control Order, 2013; NPPA; clinical establishment standards) address the complaint and where are the gaps?

F) PETITIONER / APPELLANT’S ARGUMENTS

i. The petitioners submitted that private hospitals operate or exclusively recommend in-house/affiliated pharmacies and thereby compel patients (often in weak bargaining positions) to buy medicines and consumables at inflated prices.
ii. They argued absence of price disclosure and absence of regulatory control for many consumables that may not strictly fall within definitions under the Drugs and Cosmetics Act, 1940.
iii. Reliance was placed on Directive Principles (Articles 38, 39, 47) and Article 21 to assert that the State has a duty to protect patients from exploitation and ensure affordable access to medical necessities; absence of corrective measures justified judicial intervention.
iv. They sought directions restraining hospitals from compelling purchases and asked for policy formulation by Union/States to prevent exploitation.

G) RESPONDENT’S ARGUMENTS

i. The Union and State respondents denied compulsion and pointed to statutory and administrative frameworks: Drug Price Control Order, 2013; NPPA; Jan Aushadhi; Amrit Drug Stores; and clinical standards by the National Council for Clinical Establishments.
ii. Several States questioned locus and emphasised that public health, hospitals and sanitation fall under the State List and therefore policy-making remains within State competence.
iii. Respondents cautioned against judicially imposed universal directions which could hamper private investment in health infrastructure and impede the availability of specialized services.
iv. Some States highlighted welfare schemes and cashless programmes to show efforts to mitigate patients’ costs.

H) RELATED LEGAL PROVISIONS 

i. Article 21, Constitution of India (Right to Life).
ii. Articles 38, 39, 47 (Directive Principles of State Policy).
iii. State List (List II), Seventh Schedule — public health and sanitation; hospitals and dispensaries.
iv. Drugs and Cosmetics Act, 1940 (definition and regulation of drugs).
v. Essential Commodities Act, 1955 — Drug Price Control Order, 2013 and NPPA mandate.
vi. National Council for Clinical Establishments – minimum standards (administrative guidelines).

H) JUDGEMENT

The Court recognised that access to medical facilities is integral to Article 21 and that the State has committed through Part IV obligations to progressively ensure healthcare. The Court noted the practical shortfall in State-provided infrastructure relative to India’s population, which justified facilitation of private healthcare providers. Balancing competing considerations, the Court concluded that the issues are primarily policy questions housed within State competence; consequently it declined to issue blanket mandatory judicial directions that might hinder private healthcare growth.

Instead, the Court issued a calibrated directive: it disposed of the writ petition but directed all State Governments to consider the issue of unreasonable charges and exploitation by private hospitals and to take appropriate policy decisions as they deem fit. The Court expressly refrained from opining on merits and left open the scope for State-level regulatory action, pointing to existing mechanisms such as NPPA and market interventions, and emphasised the need for a holistic policy response that protects patients without disincentivising private healthcare investment.

a. RATIO DECIDENDI

The central legal reasoning is that while the right to health is constitutionally protected under Article 21 and the Directive Principles, regulation of hospitals, medical services and related commercial activities falls within the State List. Policy measures regulating in-hospital commerce are essentially legislative/administrative policy choices.

Judicial intervention in the form of sweeping mandatory directions to regulate routine commercial practices of private hospitals would intrude upon state policy-making and risk adverse economic consequences for healthcare investment. Therefore, the appropriate remedial path is to sensitize State Governments, and direct them to evaluate and, where necessary, prescribe targeted policy/regulatory measures.

The ratio rests on constitutional federalism, separation of powers and the need for tailored policy solutions rather than categorical judicial prescriptions.

b. OBITER DICTA 

The Court recorded concern about systemic exploitation and observed that the plight of vulnerable patients merits urgent policy attention. It noted existing public initiatives (Jan Aushadhi, Amrit Drug Stores), NPPA’s pricing mechanisms and clinical establishment standards, indicating these institutional tools may be relevant to remedial action.

The Court also warned against measures that would unduly restrict private sector participation. These observations function as guidance and cautionary signals to state actors, underscoring the delicate policy balance between patient protection and sustaining private health infrastructure.

c. GUIDELINES

i. States should examine whether regulatory gaps permit exploitative pricing by hospital-linked pharmacies and consider targeted policy or legislative measures.
ii. Policy responses should balance patient protection with incentives for private investment in healthcare.
iii. States may evaluate disclosure requirements for prices of medicines, implants and consumables within hospital premises.
iv. States should assess integration with existing schemes (Jan Aushadhi, Amrit Drug Stores, NPPA mechanisms) to expand affordable supply channels.
v. Enforcement mechanisms should be locally tailored and may include consumer protection fora, health department monitoring or licensing conditions for clinical establishments.
vi. Centre and States may coordinate to ensure statutory coverage for items not caught by the Drugs and Cosmetics Act where consumer harm is evident.

I) CONCLUSION & COMMENTS

The judgment adopts a pragmatic constitutional stance: it recognises the gravity of patient exploitation claims and the constitutional dimensions of health care, but rejects a unilateral judicial solution that would supplant state policy-making. The Court’s disposal by way of a sensitisation and directive to States preserves separation of powers while creating pressure for administrative reform.

For future litigation, the decision signals that successful claims will likely require focused evidence of compulsion, specific lacunae in statutory/regulatory coverage, and requests for remedies that respect federal competence. Practically, the judgment invites States to consider price-disclosure mandates, licensing conditions linking pharmacy operations to consumer-protection norms, and strengthening of monitoring under existing frameworks such as NPPA and clinical standards.

Law students and policymakers should note how constitutional values (right to life, directive principles) interact with federal distribution of powers; the ruling exemplifies judicial restraint combined with an insistence on executive accountability. The order therefore serves as a call to action for administrative reform rather than substantive judicial prescription, and it preserves contours for future judicial engagement if States fail to act.

J) REFERENCES

a. Important Cases Referred 

i. State of Punjab v. Ram Lubhaya Bagga, (1998) 4 SCC 117.
ii. Paschim Banga Khet Mazdoor Samity v. State of W.B., (1996) 4 SCC 37.
iii. Vincent Panikurlangara v. Union of India, (1987) 2 SCC 165.
iv. In Re : Section 6A of the Citizenship Act 1955, 2024 SCC OnLine SC 2880.
v. Suman Kumar v. Union of India, 2023 SCC OnLine SC 1750.
vi. Transport & Dock Workers Union v. Mumbai Port Trust, (2011) 2 SCC 575.
vii. Govt. of A.P. v. N. Subbarayudu, (2008) 14 SCC 702.

b. Important Statutes Referred

i. Constitution of India: Article 21; Articles 38, 39, 47; Seventh Schedule, List II (State List).
ii. Drugs and Cosmetics Act, 1940.
iii. Essential Commodities Act, 1955 — Drug Price Control Order, 2013.
iv. Institutional frameworks: National Pharmaceutical Pricing Authority; National Council for Clinical Establishments.