Pharmaceutical companies' stocks are seen trading in a tight range next week as the industry awaits a final decision on the National Pharmaceutical Pricing Policy After the apex court sought a timeline from the Centre on its decision on drug pricing policy, the government Thursday said it would take a final decision by November last week.
Now, the Cabinet will take a decision on the recommendations of the Group of Ministers on new drug pricing policy once the note is placed before it on Oct 15, the government said. As per the proposals of the ministerial panel, drug prices should be market-based, that is, fixed after taking the weighted average price of all brands having at least 1% or more market share by volume.
While pharmaceutical companies are scouting for a market-based pricing formula, the apex court's directive to go back to cost-based pricing could be a big setback for the drug companies. The upcoming Jul-Sep earnings would also impact movement of stocks.
Companies such as Lupin, Cadila Healthcare, Sun Pharmaceuticals Industries and Cipla are likely to post positive results for the quarter ended September. Movement in mid-cap pharmaceutical stocks would be mainly governed by stock-specific news. Among stocks in the mid-cap pack, Aurobindo Pharma is seen gaining next week as the market is expecting the news of a plant clearance after the US Food and Drug Administration recently visited the company's plant.
