Max Healthcare’s oncology segment contributed 21% to its inpatient revenue in Q2 FY27, compared with 26% in the corresponding quarter last year, following the discontinuation of select high-value chemotherapy drugs for patients covered under the Central Government Health Scheme (CGHS).
Speaking during the company’s Q2 FY27 earnings call, Chairman and Managing Director Abhay Soi said the decline was linked to revisions in CGHS reimbursement rates, which made the supply of certain high-cost chemotherapy drugs financially unviable for the hospital chain.
Despite the decline in oncology revenue contribution, Max Healthcare reported 25% year-on-year growth in gross revenue excluding oncology. Average Revenue Per Patient (ARPP) also increased by 11% during the quarter.
The issue highlights the financial challenges hospitals face in providing high-cost cancer treatments under government health schemes. The Association of Healthcare Providers of India (AHPI) had previously raised concerns with the Union Health Ministry over reimbursement provisions affecting access to advanced cancer therapies, particularly immunotherapy.
Under the existing reimbursement framework, payments for high-cost oncology medicines are capped at 70% of their Maximum Retail Price (MRP). Hospitals have argued that the pricing mechanism makes the procurement and supply of certain expensive cancer drugs financially difficult, potentially affecting treatment access for CGHS beneficiaries.
The development brings renewed attention to the need for a sustainable reimbursement framework that balances hospital operating costs with patients’ access to advanced cancer treatment.