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The coming week is likely to be a mixed bag for pharmaceutical stocks, with stock-specific action likely. The drug pricing policy, expected on Nov 24, will be the only "hangover" for pharma stocks in the coming week. Growth in the sector is seen under pressure till the pricing policy details are out, and counters of multinational companies like GlaxoSmithKline Pharmaceuticals, Pfizer Ltd and Abbott Pharmaceuticals are likely to take cues from the specifics outlined, India being their biggest market.
Indian companies like Cipla Ltd and Cadila Healthcare are also likely to be impacted by the policy due to pricing restrictions; same goes for Ranbaxy Laboratories. Last month, a Group of Ministers formed to decide the National Pharmaceutical Pricing Policy recommended that the weighted average price of all drug brands with over 1% market share in a segment should be fixed as the ceiling price of that particular drug. The move will bring prices of 348 essential drugs under government purview. The panel's proposals will be taken up by the Union Cabinet for approval.
Counters of companies announcing their quarterly earnings will take cues from the results. Companies posting their Jul-Sep results over the week are--Dr Reddy's Laboratories on Oct 30, Glenmark Pharmaceuticals on Oct 30, and Shasun Pharmaceuticals on Nov 2. On the overseas front, the US Food and Drug Administration's approvals to Indian drug makers to market generic drugs in the world largest pharmaceutical market have been coming at a good pace.
