Shares of several pharmaceutical companies came under pressure on October 8 after the Supreme Court directed the government to constitute a committee to examine the need for a statutory framework governing unethical marketing practices by pharmaceutical companies.

Mankind Pharma and Zydus Lifesciences were among the top losers, declining as much as 2.5 percent during the session. Cipla fell 0.96 percent to Rs 1,314.50, Glenmark Pharmaceuticals declined 0.82 percent to Rs 2,263.60, while Lupin was down 0.74 percent at Rs 1,998.10.

The Supreme Court's intervention follows concerns that certain marketing practices by pharmaceutical companies, including promotional benefits offered to medical professionals, could influence prescription patterns and encourage the use of higher-priced medicines. The court has asked the government to assess whether a statutory mechanism is required to regulate such practices.

The petition was filed in 2021 by the Federation of Medical and Sales Representatives Association, seeking greater accountability from pharmaceutical companies over such practices. The court's latest direction could lead to a broader review of the regulatory framework governing pharmaceutical marketing in India.

For investors, the development introduces a potential regulatory overhang for pharmaceutical companies, particularly if tighter restrictions are eventually imposed on promotional activities. However, the court's direction at this stage concerns the examination of a possible statutory framework and does not by itself establish new operating restrictions on pharmaceutical companies.

The Supreme Court's latest intervention also reflects broader concerns around responsible pharmaceutical marketing and its potential impact on patients and healthcare costs. The court has linked such practices to concerns over access to healthcare and the potential consequences of expensive medicines being prescribed unnecessarily.