The Supreme Court on Tuesday called the mark-ups on cancer medicines sold inside hospitals 'carnage' and suggested capping the margin at a uniform 16 percent.

A bench of Justices Vikram Nath and Sandeep Mehta was hearing a case on drug pricing when it questioned the practice of hospitals making patients buy medicines from in-house pharmacies at inflated prices. The court cited an example where a drug costing 2,700 rupees was being sold at a maximum retail price of 27,000 rupees — a tenfold mark-up that patients cannot escape during treatment.

The judges asked why patients should be forced to purchase medicines from hospital pharmacies at all, and said a uniform margin cap could protect vulnerable families from exploitation. The remarks are not a final order, but they signal the judiciary's direction.

The comments rattled hospital stocks on Dalal Street. The Nifty Healthcare index fell 2.5 percent, with Apollo Hospitals dropping 6 percent to 8,165.50 rupees, Max Healthcare down over 5 percent to 929.80 rupees, Yatharth Hospitals falling 7 percent to 1,032.50 rupees, Fortis down 6 percent, and Aster DM, Manipal and KIMS dropping between 3 and 5 percent. Analysts said any margin cap would hit hospital profitability.