Share your views about "Drug Pricing Policy and its impact on earnings of cos"

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by stockjeet18, Mar 29, 2015.

  1. stockjeet18

    stockjeet18 Member

    Mar 21, 2015
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  2. Meenakshi Razdan

    Meenakshi Razdan Administrator Staff Member Moderator

    Mar 19, 2015
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    Here is a report on the NPPA by IndiaNivesh

    NPPA notifies annual WPI linked revision in ceiling prices for 509 formulation, effective 1 April 2015 | NPPA has revised ceiling prices in respect of 509 formulation pack as per Wholesale price Index (WPI) effective 1 April 2015. Accordingly, there could be price hike of ~3.8% in 509 formulation packs to factor increase in WPI in CY14 over CY13. The increase in price is in-line with the policy outlined by NPPA. This could be relief for pharma companies as their domestic formulation business was adversely impacted due to implementation of pricing policy under NLEM 2011, which had resulted in considerable reduction in prices of drugs. Though the price hike was documented in policy, actual implementation of the same would be beneficial for pharma companies and hence sentiment positive for the stocks. The benefit would vary depending on the contribution by formulations, mentioned in the recent list of NPPA, to total domestic formulation sales of the companies. Accordingly, we expect it to be positive for Cipla , JB Chemcals and Pharmaceuticals, Alembic pharmaceuticals, which have considerable portion of sales from domestic formulation segment. About 43%, 60% and 50% of sales is from domestic formulation segment for Cipla, JB Chemicals and Pharmaceuticals and Alembic Pharmaceuticals, respectively.

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  3. bholu

    bholu Active Member

    Apr 1, 2015
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    I have seen the impact of NPPA by my returns in Novartis India... :'(...can not argue against it though but hope that government gives a level playing field to all companies