Moneycontrol
Jan 12, 2017 07:18 PM IST IST | Source: Moneycontrol.com

Pharma falls on Trump's comments, analysts say impact unlikely

Shares of Sun Pharma, Dr Reddy's Labs and Cadila were down dragging the index almost 1 percent from previous close. Major Indian pharma companies earn around 15-50 percent revenue from the US market.


Shares of pharma companies were under pressure following US President-Elect Donald Trump's comments on drug pricing and foreign manufacturing. Trump said that the US will create new drug-bidding procedure.

Shares of Sun Pharma, Dr Reddy's Labs and Cadila were down dragging the index almost 1 percent from previous close. Major Indian pharma companies earn around 15-50 percent revenue from the US market.


US President-elect Donald Trump on Wednesday said pharmaceutical companies are "getting away with murder" in what they charge the government for medicines, and promised that would change, sending drugs stocks sharply lower.


Trump's campaign platform included allowing the Medicare healthcare program to negotiate with pharmaceutical companies, which the law currently prohibits. He has also discussed making it easier to import drugs at cheaper prices.


Trump said he plans to repeal the Affordable Care Act, or Obamacare, and replace it at about the same time.


However, analysts say that Indian companies are unlikely to be impacted due to pressure on bringing down prices of innovative drugs. They say Indian Pharma companies provide low cost generic drugs, keep prices of drugs low in the US. But what could hurt Indian companies are issues such as Medicare negotiating, bidding for government contracts.

Kiran Mazumdar Shaw, CMD of Biocon also agrees any negative impact on generic suppliers here is ruled out. She said she completely agrees with Trump's view but doesn't see his views affecting Indian pharma. “I don’t think these are going to be big issues; if Indian pharma companies are supplying these products to the US markets and if there are no US suppliers, which is mostly the case, this doesn’t affect the Indian pharma companies,” she said.

Sections
Follow us on
Available On