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Drug makers gain; not too hurt by pricing cap

Source : REUTERS
Last Updated: Fri, Sep 28, 2012 08:56 hrs
lupin

Shares in pharmaceutical companies gain despite a recommendation by a ministry panel to cap drug prices given the proposal is seen as less hurtful than expected.

A panel of ministers recommended capping prices for 348 drugs deemed essential by calculating the weighted average of the market prices of all the brands with more than 1 percent market share.

The proposal, which will be forwarded to the cabinet within a week, is seen less disruptive than a cap based on cost-based pricing given the latter would have a more direct impact on profit margins.

Cipla gains 1.9 percent, Glenmark Pharmaceuticals is up 0.8 percent, GlaxoSmithKline Pharmaceutical is up 0.8 percent, while Lupin gains 0.2 percent.




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