The Supreme Court on Wednesday came down sharply on steep mark-ups in essential medicines, calling a tenfold gap between a cancer drug's price to retailers and its maximum retail price "carnage" and "broad daylight dacoity" — remarks that sent hospital stocks tumbling up to 6 per cent.
A bench of Justices Vikram Nath and Sandeep Mehta, hearing petitions on medicine pricing, generic prescriptions and medical-device controls under the Drugs (Prices Control) Order, 2013, cited a cancer drug supplied to retailers at Rs 2,700 but carrying an MRP of Rs 27,000. "This is carnage. Plain and simple," the bench told Solicitor General Tushar Mehta, questioning where the money goes and who benefits. "Ultimately, the loser is the honest taxpayer. We will examine this issue thoroughly," the bench said.
The court asked the Centre to examine whether a uniform 16 per cent margin should apply to all medicines, essential or not. "Why this distinction? Essential or non-essential does not matter? Why not keep a 16% margin on MRP of everything?" Justice Mehta said. It also questioned hospitals that require admitted patients to buy medicines from their own pharmacies: "Corporate hospitals are industries. It is not a service at all. Why should the common man suffer all this?" The Solicitor General said the issue needed attention and sought two weeks to examine it.
Market reaction
Apollo Hospitals fell 5.95 per cent to Rs 8,184.50, Fortis Healthcare 5.03 per cent to Rs 777.80, KIMS 5.70 per cent to Rs 726.20 and Aster DM Quality Care 4.26 per cent. The Nifty Pharma index ended down 1.77 per cent and the BSE Healthcare index 2.19 per cent, as investors weighed the prospect of stricter regulation around drug pricing and hospital pharmacy practices.
Sources:
- Hospital stocks fall as SC questions drug mark-ups
- Apollo Hospitals falls 6% as Supreme Court flags essential drug mark-ups
A bench of Justices Vikram Nath and Sandeep Mehta, hearing petitions on medicine pricing, generic prescriptions and medical-device controls under the Drugs (Prices Control) Order, 2013, cited a cancer drug supplied to retailers at Rs 2,700 but carrying an MRP of Rs 27,000. "This is carnage. Plain and simple," the bench told Solicitor General Tushar Mehta, questioning where the money goes and who benefits. "Ultimately, the loser is the honest taxpayer. We will examine this issue thoroughly," the bench said.
The court asked the Centre to examine whether a uniform 16 per cent margin should apply to all medicines, essential or not. "Why this distinction? Essential or non-essential does not matter? Why not keep a 16% margin on MRP of everything?" Justice Mehta said. It also questioned hospitals that require admitted patients to buy medicines from their own pharmacies: "Corporate hospitals are industries. It is not a service at all. Why should the common man suffer all this?" The Solicitor General said the issue needed attention and sought two weeks to examine it.
Market reaction
Apollo Hospitals fell 5.95 per cent to Rs 8,184.50, Fortis Healthcare 5.03 per cent to Rs 777.80, KIMS 5.70 per cent to Rs 726.20 and Aster DM Quality Care 4.26 per cent. The Nifty Pharma index ended down 1.77 per cent and the BSE Healthcare index 2.19 per cent, as investors weighed the prospect of stricter regulation around drug pricing and hospital pharmacy practices.
Sources:
- Hospital stocks fall as SC questions drug mark-ups
- Apollo Hospitals falls 6% as Supreme Court flags essential drug mark-ups
