In a surprise move, the National Pharmaceutical Pricing Authority (NPPA) has capped the ceiling prices of additional drugs in the Indian market. The NPPA has exercised its power under Drug Price Control Order 2013 (DPCO 2013)- which allows it to fix the ceiling price of any drug under 'extraordinary' circumstances in the 'public interest'. NPPA has scrutinized single-ingredient drugs in the therapeutic segments of HIV, tuberculosis, anti-malaria, cardiovascular, diabetes, anti-asthmatic and immunologicals.
''As per AIOCD AWACS, the new drugs that are brought under price control have end-market sales of Rs 55 billion, approx 6% of the India Pharmaceutical Market (IPM). The ceiling price will reduce the end-market sales of the impacted products by Rs 6.4 billion, 11.5% of the sales of the impacted products. In terms of molecules, the most impacted are Enoxaparin, Glimeperide, Atorvastatin (new strength), Ramipril and Rosuvastatin,'' said Nomura Financial Advisory and Securities.
''The companies most impacted are Sanofi India, Emcure, Zydus Cadila, Abbott Healthcare and Ranbaxy. For our coverage universe we estimate EBITDA is likely to be affected by 0-2.5% and net earnings by 0-4%. Zydus Cadila and Ranbaxy (on base business) are likely to be most affected. Though the impact is limited, the move by the NPPA has increased the risk of additional controls in the future,'' it added.
