Max Healthcare discontinues patented cancer drugs, writes to CGHS to review pricing

Max Healthcare Institute Ltd on Friday said restrictive pricing guidelines under the Central Government Health Scheme (CGHS) led it to discontinue high-value patented chemotherapy drugs for institutional patients, weighing on revenue and operating EBITDA, adding that it has written to government authorities seeking a correction of the reimbursement anomaly. 

The hospital chain announced its financial and operating results for the third quarter and nine months ended December 31, 2025, on Thursday. For the December quarter, network gross revenue rose 10% year-on-year to ₹2,608 crore, driven by higher occupied bed days. International patient revenue increased 14% to ₹230 crore and accounted for around 9% of hospital revenue. 

Operating EBITDA grew 4% year-on-year to ₹648 crore, while operating margin declined to 26.1% from 27.3% a year earlier and 26.9% in the previous quarter. The company said margins were impacted by the discontinuation of patented chemotherapy drugs for institutional patients, pre-commissioning expenses related to brownfield bed additions and a change in GST rates. 

During the quarter, disruption in cashless services led to a substitution of standalone health insurer patients with PSU patients. Cashless services were restored towards the end of the quarter after settlements, it said. CGHS tariffs were revised in mid-October and are expected to be fully implemented by April 2026. PSUs and government institutions, including ECHS, adopted the revised rates in mid-December. 

Overall EBITDA per bed stood at ₹71.3 lakh, compared with ₹73.0 lakh in Q3 FY25 and ₹73.4 lakh in Q2 FY26. “As per the new CGHS Memorandum of Agreement (MoA), patients are encouraged to procure oncology drugs directly from CGHS outlets and have them administered at empanelled hospitals. However, from a clinical perspective, this practice is not recommended. Under the current reimbursement mechanism, CGHS limits reimbursement for these oncology drugs to 70% of the MRP,” a company spokesperson told Business Today.   

“This is not financially viable for private hospitals, as margins on oncology drugs are significantly lower. We have written to CGHS and ECHS highlighting this anomaly and have requested a reconsideration,” the spokesperson said.