Pharma stocks a mixed bag as drug regulator NPPA fixes retail price of 74 drug formulations

Pharma stocks were in focus during Tuesday’s trading session as drug price regulator NPPA fixed the retail price of 74 drug formulations. The Nifty Pharma index declined more than 1 per cent at the market close, while BSE Healthcare ended more than 0.5 per cent as most drug makers like Cipla, Biocon, Dr Reddy’s, and Alkem among others were a mixed bag.

The National Pharmaceutical Pricing Authority (NPPA) on Monday fixed the prices under the Drugs (Price Control) Order 2013 based on the decision of the 109th authority meeting held on February 21 this year, according to a PTI report.

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Of 20 stocks in Nifty Pharma, 14 ended in the red, while the remaining were in the green today at the market close. Cipla cracked the most on the NSE down around 5 per cent, followed by Alkem and Dr Reddy’s were down between 2-3 per cent at the close.

On the contrary, Gland Pharma shares bucked the declining trend to gain more than 5 per cent, followed by Zydus Life, Aurobindo, and Lupin, among others were also up between 0.5-2 per cent at the market close today.

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The NPPA said it has also revised the ceiling price of 80 scheduled formulations (NLEM 2022) including the one to treat epilepsy and neutropenia.

The ceiling price of one tablet (200mg) of Sodium Valproate, used to treat epilepsy and bipolar disorder, has been fixed at Rs 3.20. Similarly, the ceiling price of Filgrastim injection, used to treat low white blood cells, has been fixed at Rs 1,034.51 (one vial).

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Analysts at Nirmal Bang, a domestic brokerage firm, said the US Food and Drug Administration uncertainty is the biggest concern for the pharma sector besides the price erosion in US generics. They noted that Indian Pharma firms have not been able to address these issues for a long time.

The brokerage believes that the USFDA compliance issues will keep putting pressure on the stock prices of Pharma companies.

As, lately, Cipla stock shed 6 per cent post 8 observations received at its Pithampur plant and Sun Pharma lost 3 per cent post the import alert at its Halol plant despite both companies have the least exposure in the US generic segment among the large caps.

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