SSP Operations Peshawar in a press conference disclosed arrest of the seven members of a gang including five women and two men.
He said a kidnapped infant also recovered from the arrested gang members.
The SSP said that a doctor practicing in a private clinic in the city was also involved in hospital kidnappings of newborn children.
The gang after kidnapping used to sell the newborn to the buyers in a price between 70,000 to 300,000 rupees, the police official informed the media.
The parents in the past several cases had alleged that their newborn children were kidnapped from hospitals.
The gang, allegedly hand over dead babies to parents, with the help of inside hospital connections and sell the newborn babies to buyers.