Yatharth, Apollo, KIMS, Fortis, Max Healthcare shares fall: Why hospital stocks are declining today

Shares of hospital companies fell sharply in Wednesday's trade, with Yatharth Hospital & Trauma Care Services Ltd, Apollo Hospitals Enterprise Ltd, Krishna Institute of Medical Sciences Ltd (KIMS), Fortis Healthcare Ltd and Max Healthcare Institute Ltd among the biggest decliners.

At last check, Yatharth Hospital shares fell 5.92 per cent to Rs 1,040.15, while Apollo Hospitals declined 5.69 per cent to Rs 8,207.05. KIMS shares fell 5.49 per cent to Rs 727.80, Fortis Healthcare dropped 4.81 per cent to Rs 779.60 and Max Healthcare declined 4.55 per cent to Rs 939.20.

Other hospital stocks also traded lower. Manipal Health Enterprises fell 4.47 per cent, Rays of Belief Ltd declined 4.39 per cent, Aster DM Quality Care Ltd slipped 4.03 per cent, Aashka Hospitals Ltd fell 3.72 per cent, Artemis Medicare Services Ltd dropped 3.92 per cent and HealthCare Global Enterprises Ltd declined 3.77 per cent.

Rainbow Children's Medicare Ltd shares fell 2.26 per cent to Rs 1,337.40, Global Health Ltd (Medanta) declined 1.72 per cent to Rs 1,391.15, Indraprastha Medical Corporation Ltd dropped 3.10 per cent to Rs 343.95 and Park Medi World Ltd fell 2.57 per cent to Rs 269.40.

The decline came a day after the Supreme Court raised concerns over the steep markups on medicines sold through corporate hospitals. According to news agency PTI, the top court was told that a cancer medicine supplied to retailers for Rs 2,700 carried an MRP of Rs 27,000.

"This is carnage. Plain and simple," a bench of Justices Vikram Nath and Sandeep Mehta told Solicitor General Tushar Mehta, who was appearing for the Centre.

The bench questioned the need for different trade margins on medicines and suggested a uniform 16 per cent margin on all drugs. It also asked the Centre to examine the practice of corporate hospitals requiring patients to purchase medicines from their own chemists or specified pharmacies.

The Supreme Court observed that such practices ultimately affect patients and taxpayers, particularly when medical treatment is covered under government schemes, the PTI report also stated.

"The proposed changes, if implemented, may have implications for the margins of corporate hospitals," a source requesting anonymity said.