Equities tied to hospital operators — among them Apollo Hospitals, Park Medi World, Aster DM Quality Care, Max Healthcare, and Fortis Healthcare — retreated for a second session on Monday, 12 October, following the Supreme Court's conclusion of proceedings on proposed pharmaceutical price limits.
Trading in Apollo Hospitals and Max Healthcare both saw their stock prices retreat by up to 3% during the session. Trading in Fortis Healthcare and Aster DM Quality Care ended the session lower, with their respective stock prices retreating 3.3% and 2.8%.
Shares in Park Medi World, ranked among the two largest private hospital groups operating across North India, shed up to 6 per cent of their value when markets opened on Monday.
At Monday's Supreme Court hearing, the administration argued that pharmaceutical pricing and accessibility need to be weighed against each other, and that full market control over medicines was not its objective, pointing to the country's position as one of the lowest-priced drug markets anywhere in the world. The bench posed a question to the government about its capacity to regulate the pharmaceutical market in full, noting that its aim was to bolster the administration's own authority in that area.
The court further noted that while drug producers set retail prices with research and development expenditure factored in, those same products frequently reach consumers at ten times the listed price. Officials indicated a degree of openness toward certain proposals put forward by the Supreme Court.
A follow-up session in the proceedings is set for Tuesday, 27 October.
In an earlier hearing, the Supreme Court described the price markups applied to cancer drugs at hospital facilities as constituting grave harm to patients, and put forward a proposal to standardise the margin across all medicines at 16 per cent. A ceiling of 30% on trade margins took effect for all anti-cancer medicines outside the scheduled-drug list, under a policy the government put in place shortly after.
Medicines that fall outside the scheduled category sit beyond the reach of standard price controls and are therefore not bound by the 16% margin ceiling. A 30% ceiling on trade margins was placed by the NPPA across 42 anti-cancer medicines outside the scheduled-drug list, a restriction that took effect in 2019. According to official figures, the exercise brought down prices and delivered roughly ₹984 crore in yearly cost savings.
Fortis Healthcare shares deepened their retreat to a 3.5% drop, with Apollo, Max, and Aster DM each posting declines that ranged from 2% to 3%.
