India, Oct. 27 -- Outside the gates of Ghatkopar's Rajawadi Hospital, one of Mumbai's biggest civic-run peripheral hospitals, private pharmacists hover just beyond the entrance. Waving used prescriptions as props, they solicit business, calling out to patients in a crude and humiliating spectacle. To edge out competitors, some announce discounts and hastily escort patients to their shops. The scene resembles a local bazaar.

With most of the BMC's 16 peripheral hospitals in the grip of a crippling drugs shortage, patients have little choice but to surrender to private merchants like these, profiting from the desperation of the sick.

The shortage of drugs, medical equipment and devices, is not only a financial burden on patients who depen...