Hospital stocks rallied on Friday after the government decided to limit trade margins on non-scheduled anti-cancer drugs to 30%, a move expected to lower the prices of several cancer medicines by 20-70% and save patients an estimated ₹2,500 crore annually. The decision lifted investor sentiment, although brokerages flagged potential margin pressure and said the full impact on hospital earnings would depend on further details.
Fortis Healthcare shares surged 5.3% to ₹805.15, followed by Manipal Health Enterprises, which gained 4.3% to ₹715.50. Krishna Institute of Medical Sciences advanced 4.2% to ₹716.35, while Max Healthcare Institute rose 4.4% to ₹915. Apollo Hospitals Enterprise shares climbed 4% to ₹7,977.70, and Global Health gained 3.2% to ₹1,317.25.
However, the hospital stocks had fallen over the preceding two weeks after the Supreme Court raised concerns about the disparity between price-to-retailer (PTR) and maximum retail prices (MRP) of essential medicines. It cited an example of a cancer drug carrying an MRP of ₹27,000 against a PTR of ₹2,700.
The National Pharmaceutical Pricing Authority (NPPA), the drug pricing regulator, said the intervention could bring down MRPs by approximately 20-70%, depending on the existing distribution structure and mark-up for individual medicines.
The policy extends the government's earlier trade-margin restrictions, which covered only select oncology drugs, to non-scheduled anti-cancer medicines that do not fall under the existing list of drugs with government-set ceiling prices.