Apollo Hospitals, Yatharth, others fall up to 6% on SC’s ‘corporate hospitals don’t spare anyone’ remark

The latest market report highlights that Hospital stocks declined up to 5% on September 30 after Supreme Court voiced its concern over a steep markup of ten times on cancer drugs by hospitals and batted for a uniform 16% margin on all medicines.

A bench of Justices Vikram Nath and Sandeep Mehta asked the Centre to look into the offering of hospitals mandating the purchase of medicines from their chemists and stated it is the common man who suffers from this system.

"This is carnage. Plain and simple. The cancer drug is priced at an MRP of Rs 27,000 despite being supplied to retailers for Rs 2,700.

At 10:40 am on September 30, Apollo Hospitals, Yatharth Hospital, Max Healthcare shares were trading 4%-6% softer.

Fortis Healthcare, Krishna Institute Of Medical Sciences, Aster DM Quality Care were trading 5.2%, 3.8% and 4.2% softer, respectively.

Nifty Pharma index was trading 1% softer while BSE Healthcare index was trading 2% softer on September 30

"Corporate hospitals don't spare anyone. They won't allow even the dead body to be taken out. The pharma sector is not bothered," the bench told Solicitor General Tushar Mehta appearing for the Centre.

The bench was hearing petitions concerning regulation of medicine prices, generic prescriptions and controls on medical devices under the Drugs (Prices Control) Order (DPCO), 2013.

At the outset, Mehta stated they need to find a way out and some balance has to be created.

Justice Mehta stated, "Why this distinction? Essential or non-essential does not matter? Why not keep a 16% margin on MRP of everything?

"Think around what happens. Ultimately, the result is that the taxpayers suffer. In corporate hospitals, the MRP of an essential cancer drug was Rs 27,000 when the price to retailer (PTR) was Rs 2,700. Just see the difference."

The solicitor general stated that he needed to discuss with the officials and agreed that the offering requires attention.