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Pharma stocks fall on speculation over pricing policy

Source : REUTERS
Last Updated: Thu, Nov 22, 2012 09:40 hrs
A medical representative with Abbott talks to a chemist at a market in Pune

Shares in Indian drugmakers fall on speculation the government's final decision on the pricing policy for the sector might be more disruptive than expected.

Local media reports suggest a panel of ministers has agreed to settle on a market-based pricing mechanism, as expected, but capping drug prices at a simple average price of brands as opposed to the initial proposal of using a weighted average.

The proposal, if finalised, would be "incrementally negative" for the sector, but the impact would vary from company to company, Nomura says in a note on Thursday.

The new proposal is likely to be more negative for Dr Reddy's , Glenmark and Cadila Healthcare, Nomura says.

Cipla falls 0.1 percent, while Ranbaxy Laboratories is down 0.9 percent.

Dr Reddy's Laboratories is flat, Glenmark Pharmaceuticals is up 3.9 percent and Cadila gains 2.2 percent.

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