For the stock market, September 30 was no less than a big blow for corporate hospitals. After a very strict and candid comment by the Supreme Court, a huge fall of up to 6 percent was recorded in the shares of big hospitals of the country. The court has expressed deep concern and displeasure over the huge profits being made on medicines by the hospitals by robbing the patients' pockets. The court's anger was mainly expressed on how patients are forced to buy medicines only from the medical stores located inside the hospital, due to which the common man is suffering badly.
Supreme Court's anger over the high prices of medicines
The bench of Justice Vikram Nath and Justice Sandeep Mehta used very strong words during the hearing regarding the skyrocketing prices of medicines. The court bluntly said that corporate hospitals do not spare anyone in terms of earnings. The bench even said during the hearing that these people sometimes do not even allow the dead body to be taken out. The court shocked the nation by giving the example of medicine for a serious disease like cancer and told how a life-saving medicine available in the market for Rs 2,700 is being sold to patients for up to Rs 27,000. The court has clearly termed this situation as 'carnage'.
Shares of big hospitals crashed in the stock market
The effect of this strict stance of the Supreme Court was immediately visible on the stock market. During trading, shares of Apollo Hospitals, Yatharth Hospital and Max Healthcare fell by 4 to 6 percent. Apart from this, shares of Fortis Healthcare fell by 5.2 per cent, shares of Krishna Institute of Medical Sciences (KIMS) fell by 3.8 per cent and shares of Aster DM fell by 4.2 per cent. This earthquake in this creamy sector had an impact on the entire healthcare market, due to which Nifty Pharma Index was trading with a decline of 1 percent and BSE Healthcare Index was trading with a fall of 2 percent.
Big suggestion to fix 16% margin on medicines
During the hearing of the cases, the court asked a direct question to the Central Government that why not fix a uniform margin of 16 percent on the MRP of all medicines? The court had clearly said that there should not be any distinction between essential and non-essential medicines, because ultimately the entire financial burden has to be borne by the common taxpayers. Agreeing with these serious concerns of the court, Solicitor General Tushar Mehta said that this important issue needs serious attention and he will hold a meeting with the concerned authorities in this regard.
How much impact will this have on the profits of hospitals?
Market experts and analysts believe that this stance of the Supreme Court may have a strong impact on the earnings of hospitals in the future. According to statistics, the sale of medicines and medical equipment accounts for about 20 to 35 percent of the total income of hospitals. Nitant Darekar, Research Analyst, 'Bonanza', says that if the government imposes 16 per cent margin on medicines, there could be a huge decline in the profits of pharmacy-based hospitals like Apollo, Max, Aster DM, Medanta and Fortis. Apollo Hospital may be most affected in this, because it has a huge network of retail pharmacies. However, its impact on clinically based hospitals like Narayan and Jupiter is expected to be less. At present this is a suggestion of the court and no final decision or order has come on this. The next hearing of this entire matter has been fixed for October 12, 2026.