The Competition Commission is probing a Mumbai-based hospital for alleged unfair business practices in the stem cell market by restricting parents from preserving newborn’s stem cells at banks of their choice.
Stem cells are increasingly being used for regenerative medicine. These cells, which can help in treating a variety of diseases, are generally taken from cord blood and bone marrow.
The Competition Commission of India is investigating a complaint related to preservation of stem cells against Mumbai-based L.H. Hiranandani Hospital, according to CCI’s latest newsletter.
The Commission has “found prima facie evidence that the hospital may have abused its dominant position under the Competition Act, 2002 and directed the Director General (DG) to investigate the matter“.
DG is the investigating arm of the Commission.
Considering its commercial viability, competitive concerns are emerging in the business model of cord stem cell banking in India, it added.
The informant had submitted to the Commission that while obtaining maternity services of the hospital, he was not allowed to take LifeCell’s umbilical cord stem cell banking services’.
“The said hospital, instead, insisted to have the services from Cryobanks, with which the hospital had an exclusive tie-up,” the newsletter said.
As per the newsletter, companies like LifeCell and Cryo-Cell provide various services relating to collection and preservation of the cord blood and cord tissue.
The Commission found that the patients were forced to take services of Cryobanks, if they wanted to preserve the stem cells of their new born babies.
“The consumers were left with no other choice for availing themselves of the stem cell services, while hospitalised in the said hospital. Prima facie, the agreement between the hospital and Cryobanks was found to be exclusive in nature and in violation of Section 3(4), requiring further investigation by DG,” the newsletter said.
Moreover, the commission has found that the hospital is a dominant player in the relevant market—of providing maternity services in high end multi-speciality hospitals in Mumbai, among others.
“ ... the condition imposed by the said hospital to avail the stem cell banking services of Cryobanks only, appears to be an unfair condition and a prima facie violation of Section 4, that is, abuse of dominant position, requiring further investigation by DG,” the newsletter said.
A new born’s stem cells are preserved so that if necessary, these cells can be harvested to treat diseases in the future. They are taken soon after birth from the umbilical cord blood.