Indian pharmas gain; hopes for market-based price cap

Last Updated: Mon, Oct 15, 2012 08:04 hrs

Shares of pharmaceutical companies gain on hopes the government will stick to a recommendation from a panel of ministers last month to cap prices of drugs deemed essential using market prices as the key criteria.

Though the measure, if implemented, would hit prices of drugs, the impact would be less severe than a price cap based on costs, which would more directly hit margins, analysts say.

The Financial Express newspaper reports on Monday the government will stick to the market-based formula, and says the department of pharmaceuticals will circulate a final Cabinet note early this week, without citing sources.

Ranbaxy Laboratories gains 1.4 percent, Dr Reddy's Laboratories gains 1 percent, while Cipla is up 1.1 percent.

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