In a move that could reduce prices of expensive anti-diabetic and cardiac medicines, National Pharmaceutical Pricing Authority (NPPA) has decided to bring them under price control by adding 108 formulation packs of 50 anti-diabetic and cardio-vascular medicines to price control list.
Speaking to CNBC-TV18 Kewal Handa, former MD, Pfizer says the move will reduce the prices of cardio-vascular drugs by almost 15-50 percent which may impact the revenues of drug companies.
According to Handa, the pricing regulator has gone beyond the national list of essential medicines (NLEM) and may include many more drugs, especially the cancer drugs going ahead, as per the suggestions by the health ministry.
Also Read: See 2% EBITDA impact on pharma pricing expansion: Religare
Phrama analyst Surajit Pal of Prabhudas Lilladher also added to the discuiion saying that medicines related to oncology segment can also come under scanner in future. Companies like Sanofi , Cipla , Torrent and Cadila will suffer due to the reduction in prices of anti-diabetic and cardiac drugs.
Below is the verbatim transcript of the discussion:
Kewal Handa, Former MD of Pfizer
Q: What is your first reaction to the price cap on medicines?
A: There was an expert committee which formed the essential drugs and the prices are fixed based on the essential drugs. But now they have gone beyond the essential drug list and included the cardiovascular as well as diabetic products. Now this is something which has not happened even in the earlier drug policies.
Once you set up a policy, you have some level playing and then you change the game suddenly which is not very fair. However, they have given an extra 25 percent premium as compared to the normal essential list pricing for the new coverage for cardio as well as the diabetes products.
Q: What does this mean in terms of a regulatory standpoint?
A: If you now look at what the health ministry is saying is to cover almost all the cancer products and they would also go on for covering some of the high price imported products. So this becomes quite arbitrary depending upon whether the product is high-priced or not and whether the product is essential or not.
Q: What would be the impact in terms of loss of market share and maybe even earnings for some of the big MNC players? Do you think they can contest this move?
A: They have not yet overcome the first losses and now this comes over and above the losses that they have suffered in the first list. It will take a while for most of the companies including some of the Indian companies to recover these because these are chronic products, used regularly by the patients and the prices now being set up will impact the profitability.
Q: How much on an average do you think prices could fall for these cardiovascular as well as diabetic drugs?
A: It could fall anywhere from 50 percent to 15 percent. Some of the companies have seen the prices as high as 50-60 percent going down.
Q: Is there an opportunity in terms of volume or extensive volume growth that these companies could get because augmenting also came under the price control sometime back and eventually saw huge volume growth despite price erosion?
A: The companies that focus on spend and for companies, which want to build up volumes and brands would definitely see this as an opportunity. However, companies who were earlier pushing the products on price would also see loss of volumes because then doctors will now prescribe good brands for those patients who were not able to afford these drugs.
Surajit Pal, pharma analyst, Prabhudas Lilladher
Q: Sanofi might see the biggest impact in terms of loss of sales, what is your calculation on the same?
A: Apart from Sanofi, among the Indian companies, Torrent, Cadila, Cipla, Ranbaxy , Sun Pharma might see the impact initially. But overall, if you consider the number, the maximum impact on domestic sales for them could be maximum 2 percent and on EBITDA level, it would be anything between 0.2 and 0.5 percent.
Q: Is today's fall a good buying opportunity for the kind of names that have fallen especially stocks like Sanofi?
A: MNC like Sanofi or GlaxoSmithKline are going through a lot of restructuring. This is because the global parents of these companies are getting into some of the swapping of their assets. So definitely they would provide some opportunity to get into MNC pharmaceuticals in terms of expecting their growth going forward in domestic market.
Q: Mr Handa mentioned that maybe there could even be cancer drugs that could be considered to come under NPPA at some point in time. If that is the case, which companies would see the maximum market share erosion and price erosion and which companies could be most impacted?
A: Yes, the bigger threat is the eight therapeutic areas they have mentioned, that will be under their observation currently before they come out with any kind of concrete recommendation for reducing rate. But other than the 50 products, which is a new list, they have identified eight therapeutic areas and onCore is one among them.
If you go by the growth rate of the therapeutic area in chronic therapy, onCore has the highest rate since last year in terms of growth though at a lower base vis-à-vis cardio or diabetic but definitely it is a very high growth segment.
Q: Which domestic companies are most focused on the oncology segment?
A: I think Natco is one among them then Dabur Pharma which has been acquired by the Fresenius Kabi is also among them. Then Dr Reddy 's, to a certain extent yes, but MNC firms like Sanofi definitely are very much prevalent and Glaxo sold its cancer unit to its MNC friend. But most of the MNCs generally import these drugs from outside and sell in India maybe at a higher price and if you compare their price vis-à-vis the Indian companies like Natco or Cipla, it is much lower, almost around 20 percent of the MNC price. So if any restriction comes into picture and if the formula, which is simple pricing average of more than one percent market share then it will hugely impact the topline and bottomline of MNC pharmaceutical company.
Anda sedang membaca artikel tentang
See prices of cardiac drugs reduce by 15-50%: Ex-MD Pfizer
Dengan url
https://kesehatanda.blogspot.com/2014/07/see-prices-of-cardiac-drugs-reduce-by.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
See prices of cardiac drugs reduce by 15-50%: Ex-MD Pfizer
namun jangan lupa untuk meletakkan link
See prices of cardiac drugs reduce by 15-50%: Ex-MD Pfizer
sebagai sumbernya
0 komentar:
Posting Komentar