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As the new Drug Price Control Order (DPCO) has come into effect, the growth of major pharmaceutical companies has taken a hit in the basket of drugs for which the ceiling prices have been fixed by the government.
Data analysis by the All India Organisation of Chemists and Druggists (AIOCD)-AWACS, a pharmaceutical market research organisation, shows that during July the basket of products where the ceiling prices were fixed de-grew by 2.2 per cent compared to the other products which grew by 10.8 per cent.
For some companies the impact of the DPCO has been significantly higher, mainly due to the percentage coverage of products under the DPCO where the ceiling price has been fixed, and partly due to their products or brands being above the ceiling price. As for example, for Mankind Pharma, the DPCO products grew by 20.3 per cent in July, as almost all of them were below the ceiling price. In contrast, for Ranbaxy, the DPCO products registered a de-growth of 28.1 per cent as most of them were above the ceiling price.
So far, the overall pricing has been declared for 10 per cent of the industry turnover, and in the coming weeks ceiling price announcement is expected for another seven to eight per cent of products.
Some of the pharma companies which have suffered a de-growth in the ceiling price declared drugs category after the DPCO notification include, Zydus Cadila (-9.9 per cent), Glaxo (-16.8 per cent), Ranbaxy (-28.1per cent), Lupin (-1.5 per cent), Glenmark (-2.1 per cent), Sanofi-Aventis (-10.4 per cent), Abbott India (-14.3 per cent), while others that have benefitted after the new DPCO include names like Cipla (15.6 per cent), Mankind (20.3 per cent), Alkem Labs (19.8 per cent), Aristo (24.8 per cent), Intas (5.8 per cent), Dr Reddys (8.9 per cent), Torrent Pharma (8.9 per cent) among others.
While the DPCO officially came into effect from end July, the order was notified on May 15 announcing the name of the drugs that would come under control and the first set of 151 formulations for which the National Pharmaceutical Pricing Authority (NPPA) fixed prices was announced on June 14. Chirag Doshi, a senior official of the Indian Drug Manufacturers' Association (Gujarat chapter) said that many companies had started calculating the ceiling price and were already pricing drugs as par the DPCO in the new batches they manufactured.
Industry sources said that companies did this to avoid recalling batches of drugs in the market to re-label them as par the DPCO in order to avoid logistical issues. As far as therapeutic segments are concerned, cardiac, analgesics,respiratory, gynaecological, neurological, dermatological,hormones have seen de-growth, while segments like anti-infectives, gastrointestinal have shown some growth during July.
