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Stocks of major Indian pharmaceutical companies are seen facing an air of uncertainty in the coming week ahead of the Supreme Court's verdict on the National Pharmaceutical Policy that has been approved by the Union Cabinet.
We see non-government organisations pushing for a cost-based pricing policy, and in turn delaying the verdict of India's apex court. The court is slated to announce its verdict on the long pending pharma pricing policy on Tuesday. The Cabinet had Thursday approved the policy formulated by the empowered group of ministers.
The ministers' panel had 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.
Indian pharmaceutical companies are not going to see a major impact due to the policy. Most domestic drug makers are estimated to incur a single-digit percentage fall in their bottomlines. The Cipla Ltd, Ranbaxy Laboratories Ltd, and Cadila Healthcare are the Indian companies that would face comparatively larger losses as against their other local peers.
If the pharma policy is accepted as it is by the court, Thavkar sees shares of almost all Indian pharmaceutical companies performing well in the
coming week. Pfizer is set to take the biggest hit, with a reduction of about 24% in its bottomline. Atorvastatin, the generic version of Pfizer Inc's cholesterol-lowering blockbuster drug Lipitor, was launched in the US market last December.
