THE UNION Health Ministry has defended the constitutional validity of the 2012 Central Rules which require clinical establishments to charge for their procedures and services “within the range of rates determined by the Central government from time to time, in consultation with state governments”.
The ministry said ‘The Clinical Establishments (Central Government) Rules, 2012’ were framed to “achieve” the mandate of Article 47 of the Constitution, which deals with the Directive Principles of State Policy.
In a counter-affidavit filed in the Supreme Court on August 4 in response to a batch of petitions challenging Rule 9 (ii), the government said it “has been enacted to ensure that prices of healthcare services are neither so exorbitantly high that they remain out of reach of the common man, nor so abysmally low that there is no incentive for the industry to improve and grow”.
The government said, “Article 47 of the Constitution mandates the State, as one of its duties, to improve public health” and The Clinical Establishments (Registration and Regulation) Act, 2010 and the 2012 Rules “have been enacted with the bona fide objective of improving the quality, safety, transparency, accountability and accessibility of healthcare services across the country”.
“The legislative framework seeks to prescribe minimum standards of facilities and services while ensuring that patients are informed of the charges levied by clinical establishments. The provisions of the Act and the Rules are intended to promote public interest and strengthen the healthcare delivery system in furtherance of the constitutional mandate under Article 47…The law relating to provision of health services will be incomplete without necessary provision relating to affordability of health services,” the government said.
The affidavit pointed out that “one of the primary requirements for registration is to ensure that all clinical establishments meet certain standards” and “fixing standards envisages within its scope all elements that make up a clinical establishment, such as the equipment used, the quality of employees, the standard of service provided and an integral element as also a consequence of these standards is the price of services provided. Whenever the law intends to deal with fixing standards, law may also contemplate and provide for — either expressly or otherwise — to fix the relevant price range in respect of such standards”.
Drawing a comparison, the government said: “The regulation of capitation fees in the case of professional educational institutions is a clear example of fixing standards.”
The Centre said that the challenge to Rule 9(ii) “as being in violation of Article 14, 19(1)(g) and 21 of the Constitution is ill-founded and baseless” and it “has been enacted in pursuance of the State’s positive obligation under Article 47 to improve public health”.
The government said that the impugned provision “does not purport to prescribe uniform prices, rather a range of prices” but “enables clinical establishments to adjust their charges based on factors such as infrastructure, quality of service and patient demographics”.
“This framework aims to balance affordability for patients with the financial sustainability of healthcare providers, promoting a more equitable and efficient healthcare system. By setting minimum standards, including the range or rates, the Rules ensure that each establishment can operate effectively within its specific context, thereby promoting equitable healthcare access without imposing undue burden on any single entity and making it more accessible and affordable for the patients.”
Rejecting the contention that the Rule is violative of Article 19(I)(g), which deals with the fundamental right to practise any profession, trade or business, the government said: “Medical or clinical establishments cannot be placed on the same footing as any other trade or business establishment. While sustainability of a clinical establishment will certainly be a relevant factor, the state can always enquire into whether the returns from the working of a clinical establishment are reasonable and not in infringement of affordability.”
The affidavit stressed that “any right to establish a clinical establishment, like any other trade, profession or business, can and must be subject to certain reasonable restrictions in the interest of the general public as per Article 19(6)”.
The government pointed out that “price fixing or even price ceiling is not alien to the Indian economy or jurisprudence” but “has been an integral part of ensuring growth of the Indian pharmaceutical industry while also ensuring that the essential medicines are accessible to all. Similarly, under the scheme of the Legal Metrology Act, as part of setting standards for retail sale of pre-packaged produces, the Rules framed thereunder provide for “retail sale price”, or what is colloquially referred to as the Maximum Retail Price, which is the highest price at which a pre-packaged product may be sold by a retailer to the final consumer”.
Reminding that ‘health’ is a State subject, the Centre said the Clinical Establishments Rules “will be applicable only when the Act is adopted and made applicable in a particular State or Union Territory. As per the provisions of the Act, it is within the ambit of powers of the States and Union Territories to adopt the Act under Clause (I) of Article 252 of the Constitution and thereafter implement and monitor the Act, and the role of the Central Government is restricted to prescribing the guidelines, categorisation, standards etc to facilitate the implementation of the Act”.
The affidavit pointed out that as on date, 19 States and Union Territories have adopted the Act. These are Bihar, Jharkhand, Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Sikkim, Rajasthan, Mizoram, Uttar Pradesh, Assam, Haryana, Telangana, Puducherry, Dadra & Nagar Haveli and Daman & Diu, Andaman and Nicobar Islands, Chandigarh, Lakshadweep, Jammu & Kashmir and Ladakh.
It added that 16 states and 1 UT — Andhra Pradesh, Maharashtra, Madhya Pradesh, Punjab, Odisha, West Bengal, Chhattisgarh, Tamil Nadu, Meghalaya, Kerala, Karnataka, Manipur, Nagaland, Tripura, Gujarat, Goa and the National Capital Territory of Delhi — have their own acts.
The government said pursuant to the court’s direction, the Union Secretary (Health & Family Welfare) had also held meetings with counterparts in the States and Union Territories “to come up with a concrete proposal regarding implementation of Rule 9(ii)” and “to consider any concerns” they “may have in implementing the impugned Rule”.
The ministry said ‘The Clinical Establishments (Central Government) Rules, 2012’ were framed to “achieve” the mandate of Article 47 of the Constitution, which deals with the Directive Principles of State Policy. (Image generated using AI) 
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