Hospital stocks fall as SC questions drug mark-ups
The sell-off came after the Supreme Court raised concerns over the wide gap between the price at which hospitals procure medicines and the maximum retail price charged to patients.
Mumbai: Shares of prominent hospital corporations experienced a sharp decline on Wednesday, after the Supreme Court expressed apprehensions regarding the significant mark-ups on medications sold through private hospitals. Apollo Hospitals Enterprise witnessed a 5.95% drop to Rs 8,184.50, while Fortis Healthcare experienced a 5.03% decrease to Rs 777.80.
KIMS and Aster DM Quality Care followed suit, dropping 5.70% to Rs 726.20 and 4.26% to Rs 703.95, respectively. The overall healthcare sector was also impacted, with the Nifty Pharma index declining 1.77% and the BSE Healthcare index dropping 2.19%. The sell-off was triggered by the Supreme Court's concerns over the substantial gap between the procurement price of medicines by hospitals and the maximum retail price charged to patients.
The court specifically questioned a cancer drug that was procured for Rs 2,700 but sold to consumers for Rs 27,000, highlighting the stark tenfold difference. Justice Vikram Nath and Justice Sandeep Mehta emphasized the "carnage" of such pricing practices, questioning the arbitrary distinction between essential and non-essential medicines and advocating for a uniform 16% margin on all medicines.
The court also raised questions about the pricing of medicines with and without combinations, urging the central government to investigate the matter further. The Supreme Court's inquiry into medicine pricing, generic prescriptions, and medical device controls under the Drugs (Prices Control) Order, 2013, has brought hospital pharmacy practices under intense scrutiny.
Written by urgent.news from ETHealthworld's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
