Tara Mental Hospital in Sandton, north of Johannesburg, is running out of drugs for its patients, said the DA.
But the Gauteng Department of Health has denied the claim.
The hospital has 100 patients and consults more than 1000 outpatients a month.
"This is a crises that affects the patients and the Gauteng Health Department needs to do something about this," said Jack Bloom, DA spokesman for health in Gauteng.
Bloom said the hospital staff are expected to prescribe old-order medicines, a regimen that is far less effective and sometimes has unexpected side-effects on the patient.
This regimen could cause patients to regress, leading to patients being hospitalised.
According to department spokesman Howard Ndaba the hospital is not experiencing a shortage of drugs.
Ndaba said the Health Department had been to the hospital to investigate the alleged shortage of drugs and found the allegations to be incorrect.
Bloom said the hospital's budget was "unrealistic".
However, the hospital's acting chief executive, Dr B Nataragan, confirmed that the hospital was experiencing a shortage of drugs.