Viswanath Pilla Moneycontrol News
Last week, the pharmaceutical and healthcare sector was in the news over the use of generic drug names in prescriptions. Also, fourth quarter earnings, debate over drug price control and regulatory issues kept the spotlight on the sector.
Here is what happened in the sector:
How did pharma index perform?
The BSE Healthcare index underperfomed the benchmark Sensex, shedding 0.30 percent during the week, compared to a 1.74 percent rise in the main index.
Key pharma stocks like Lupin, Dr.Reddy’s, Aurobindo, Cadila, Glenmark and Cipla declined, and Sun Pharma remained flat.
Regulatory issues
The United States Food and Drug Administration (US FDA) released observations of some of the largest drug makers.
Sun Pharma - The company received 11 observations for its second most important plant at Dadra in terms of supplies to the US.
The company didn’t disclose nature of these observations, but analysts indicated that many were of procedural in nature.
Lupin - US FDA issued Form 483 with 3 observations to Lupin's Goa plant. The observations were largely procedural in nature related to standard operating procedures.
Dr Reddy's - The company received 11 procedural observations for its plant-3 at Bachupally in Hyderabad.
Generic debate
The debate on Prime Minister Narendra Modi’s statement in Surat about the government contemplating on bringing a new law to ensure doctors prescribe generic drugs refuses to die down.
The Medical Council of India (MCI) - that registers doctors and regulates medical education - also issued a notification directing doctors to use generic names.
While the doctor bodies say that MCI code doesn’t restrict them to use brand names in prescription and said that ensuring patient gets the best quality drug is their priority.
The industry, unhappy with the development, called on the government to ensure uniform quality standards across the board before moving ahead with the proposed law.
Stents, drug price control and NPPA
The drug price regulator NPPA rejected applications of Abbott and Medtronics to withdraw their stent products in India on commercially unviable reasons.
The medical device makers especially the multinational companies, who enjoy two-thirds of market for coronary stents used in angioplasties, are said to have been impacted by NPPA's decision to include stent maker under price control.
NPPA last added further 15 new formulations under drug price control.
With the latest additions, the government has brought 732 essential drugs under price control in the National List of Essential Medicines (NLEM) since April 2016.
Q4 Results
Biocon and its subsidiary Syngene announced Q4 results last week. The results were lacklustre. However, Biocon indicated that it’s proposed biosimilars foray into highly regulated markets such as US and Europe by FY19 is on track.
Thing to look out for this week
Ajanta Pharma, Merck, Sanofi, and Sun Pharma Advance Research Company will announce Q4 results this week.
Further news on US FDA inspections and the debate over use of generic name is also expected.
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