Shares of drug firms fell as much as 11 per cent after the country’s pharmaceutical pricing regulator capped the prices of 50 drugs used to treat diabetes and heart diseases.
The Indian unit of French drug maker Sanofi SA, which sells a range of anti-diabetes and heart disease medicine, has been among the worst hit, with the company’s stock dipping falling by up to 11 per cent during the day before recovering to close the day with a fall of 10 per cent. Divi’s Lab was another major loser during the day as its share price fell by 3.7 per cent before recovering to close with a fall of 3 per cent. Elder Pharma, Sun Pharma too fell by 3.1 and 2.4 per cent. The BSE healthcare index fell by 0.53 per cent on Monday even as the benchmark Sensex at the Bombay Stock Exchange closed almost flat with a minor fall of 0.07 per cent.
The notification, which was issued by the National Pharmaceutical Pricing Authority (NPPA) on Friday, has put the 50 drugs under price control and reduced their retail price in the range of 10 per cent to 35 per cent. “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,” said NPPA in a notification issued on Friday.
Other companies that are affected by the regulator’s price control order include Sun Pharmaceutical, Dr Reddy’s Laboratories, Ranbaxy Laboratories, Lupin, Cadila Healthcare, Glenmark Pharmaceuticals and Wockhardt. The order will come into effect on July 25.