Hospital Stocks Fall Up to 6% After Supreme Court Questions Drug Mark-Ups
Shares of major hospital chains came under selling pressure after the Supreme Court raised concerns over steep mark-ups on medicines sold through corporate hospitals and questioned the practice of requiring patients to purchase medicines from
Shares of major hospital chains came under selling pressure after the Supreme Court raised concerns over steep mark-ups on medicines sold through corporate hospitals and questioned the practice of requiring patients to purchase medicines from hospital-owned or designated pharmacies. The development has brought renewed attention to medicine pricing, hospital pharmacy practices and the affordability of treatment for patients.
On September 30, Apollo Hospitals Enterprise shares fell 5.95%, Fortis Healthcare declined 5.03% and Krishna Institute of Medical Sciences (KIMS) dropped 5.70%. Aster DM Quality Care fell 4.26%, while the Nifty Pharma Index declined 1.77% and the BSE Healthcare Index fell 2.19% during the session. The BSE Hospitals Index was also reported to have fallen around 5%.
The Supreme Court’s observations followed an example involving a cancer medicine reportedly supplied to retailers for approximately ₹2,700 but carrying an MRP of ₹27,000, representing a ten-fold difference between the two prices. A Bench of Justices Vikram Nath and Sandeep Mehta questioned whether a uniform 16% margin could be considered across medicines and asked the Centre to examine the broader issue of medicine mark-ups.
The Court also questioned allegations that some corporate hospitals require admitted patients to purchase medicines through their own or designated pharmacies, potentially limiting access to medicines available through external channels. The matter has implications for discussions around medicine affordability, hospital pharmacy revenues and pricing transparency, although any regulatory changes would depend on further proceedings and decisions by the competent authorities.
The Supreme Court is scheduled to hear the matter again on October 12, 2026. Meanwhile, the issue has placed hospital-sector business models and medicine pricing practices under increased public and regulatory scrutiny, with investors assessing the potential impact of any future changes in pricing or pharmacy-related regulations on hospital revenues and margins.
