The court asked the Centre why a 16 per cent retail margin could not apply to all medicines, and will hear the matter again on 12 October.
New Delhi: Shares of listed hospital chains fell by as much as 6 per cent on Wednesday, a day after the Supreme Court questioned why patients at corporate hospitals pay many times the trade price for medicines, according to Moneycontrol.
By mid-morning, Apollo Hospitals, Yatharth Hospital and Max Healthcare were down between 4 and 6 per cent, while Fortis Healthcare, Krishna Institute of Medical Sciences and Aster DM were lower by 5.2, 3.8 and 4.2 per cent respectively, the report said. The BSE Healthcare index slipped 2 per cent and the Nifty Pharma index 1 per cent.
The fall followed a hearing on Tuesday before a bench of Justices Vikram Nath and Sandeep Mehta, which was taking up a petition by Kishan Chand Jain. The plea seeks compulsory prescription of generic medicines, tighter price control on drugs outside the current regime and caps on the MRP of medical devices, India Today reported.
The bench pointed to a cancer drug with a price to retailer of about Rs 2,700 and an MRP of Rs 27,000, and objected to hospitals that require admitted patients to buy medicines only from their in-house pharmacy. Where such a patient is covered by a government scheme, the court said, the inflated price is ultimately reimbursed from public money. It also asked why essential and non-essential medicines are treated differently, and whether a uniform 16 per cent margin could be applied across the board.
Solicitor General Tushar Mehta, appearing for the Centre, accepted that the issue needed attention and sought time for consultations among government departments. He told the court that drug manufacturers are not always the main gainers from the gap between trade price and MRP, and that private hospitals may keep a large share of it, according to India Today. “Corporate hospitals are industries,” the bench said.
Nitant Darekar, research analyst at Bonanza, estimated a drag of about 50 to 150 basis points on consolidated EBITDA margin for chains with large pharmacy and diagnostics arms, naming Apollo, Max, Aster DM, Medanta and Fortis, Moneycontrol reported. He put the effect at under 50 basis points for clinical-heavy chains such as KIMS, Narayana, Rainbow, Jupiter and Shalby, and noted that the court’s remarks are not yet a binding order.
Source: Moneycontrol and India Today, 29-30 September 2026
