Shares of pharma firm Sanofi India plunged over 10 per cent today after drug pricing regulator National Pharmaceutical Pricing Authority (NPPA) fixed the price of medicines that are used to treat diabetes and cardiac disorders.
Sanofi India's stock tanked 10.22 per cent to settle at Rs 2,900. In intra-day trade, the scrip plunged 10.99 per cent to Rs 2,875.
At the NSE, the stock settled 10.49 per cent lower at Rs 2,913.
Selling was also seen in other pharma scrips as Cipla lost 0.71 per cent, Dr Reddys Laboratories was down 0.55 per cent and Sun Pharma fell 0.51 per cent.
In a move that is likely to bring down prices of some of the key medicines, drug pricing regulator NPPA has fixed the price of 108 non-scheduled formulation packs of 50 anti-diabetes and cardiac medicines.
"The National Pharmaceutical Pricing Authority (NPPA) has fixed the prices of anti-diabetic & cardiovascular in respect of 108 non-scheduled formulation packs under Paragraph 19 of DPCO, 2013," the NPPA said in a notification.
The drugs that will become cheaper would include atorvastatin, gliclazide, glimepiride, heparin and metolazone among others.
Commenting on the development, Angel Broking VP Research - Pharma Sarabjit Kour Nangra said: "It is estimated that around Rs 5,500 crore of the pharma market will be impacted, with the range of prices being reduced from 10-15 per cent to as high as 35 per cent, with the average reduction around 12 per cent."
What makes the development significant is that NPPA has fixed prices of those medicines which are not listed under the national list of essential medicines (NLEM), Nangra said.
The biggest impact will be felt for companies like Sanofi, Zydus Cadila, Ranbaxy, Cipla, Lupin, DRL and Sun Pharma, she claimed.
Nangra further added that amongst the domestic and MNC players, the latter would be impacted the most, as they mostly price their products much higher than the competition and derive 100 per cent of their sales from Indian markets.
