What are the implications of the govt's ban on 14 fixed-dose combination drugs?

The ban will result in several popular over-the-counter drugs being removed from the market. Representative Image

The Indian government recently banned the 14 fixed-dose combination (FDC) drugs, citing a lack of therapeutic justification and potential risks to individuals. FDCs are medications containing multiple active drug ingredients prescribed for specific diseases.

One of the popular FDCs on the banned list is nimesulide+paracetamol, commonly used to alleviate pain associated with toothache, ear pain, joint pain, headache, menstrual cramps and fever. Another combination that has been banned is amoxicillin+bromhexidine, typically prescribed for lower respiratory tract infections. The ban particularly targeted drugs in the cough and cold segment, including combinations with codeine, an opioid pain reliever.

The moves come against the backdrop of recent incidents of deaths linked to the use of cough syrups exported from India, which raised concerns about the scrutiny of Indian drug regulators and affected the reputation of Indian pharmaceutical companies.

The ban will result in several popular over-the-counter drugs being removed from the market, including well-known cough syrups like Mankind's Codistar and Tedykoff, and Glenmark's Ascoril C. While the list also targets some drugs with sizeable market share, analysts do not see the ban causing much disruption in revenues for companies.

"Among the companies that saw their drugs in the banned list, Alkem Laboratories, Mankind Pharma and Abbott India are likely to feel a 1-2 percent impact on their revenues," said Mitesh Shah, pharma research analyst at Nirmal Bang Institutional Equities.

As for others like Cipla or Glenmark, the impact is unlikely to be materially significant, Shah added. He also pointed towards another roadblock that will be triggered by the drug ban. "As the DGCI (Drugs Controller General of India) turns more cautious of the FDC drugs available in the market, the ban is also expected to result in much tighter scrutiny in receiving drug approvals at the state level."

Also Read: Govt bans 14 cocktail drugs for posing health risks, lack of therapeutic justification

Bino Pathiparampil, head of research at Elara Capital, seconded the view that the drug ban will not have a material impact on many listed companies. However, he does believe that the move will have adverse implications for players that are unlisted.

"Generally it is the unlisted players that have difficulties around safety and compliance when it comes to drug regulations. Listed companies tend to have their quality checks under control and, hence, the ban will not make things any more difficult for them," Pathiparampil added.

Given that the recent news of people dying due to the use of Indian cough syrups has been also attributed to lapses at small, unlisted pharma companies, some analysts also believe that the step to tighten regulations is in the right direction.

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