Profit

Drug makers gain; not too hurt by pricing cap

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Shares in pharmaceutical companies gained 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 per cent 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 gained 1.9 per cent, Glenmark Pharmaceuticals rose 0.8 per cent, GlaxoSmithKline Pharmaceutical advanced 0.8 per cent, while Lupin gained 0.2 per cent.


Copyright Thomson Reuters 2012



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