Select pharma stocks fall, Ranbaxy dips 6%

Lupin, GSK Consumer Healthcare, Venus Remedies and Elder Pharma are down 5% each on BSE.

Shares of pharmaceutical companies are under pressure in noon deals trades and declined up to 6% on Bombay Stock Exchange (BSE).

Ranbaxy Laboratories, Lupin, GlaxoSmithkline Consumer Healthcare, Venus Remedies and Elder Pharma are down in the range of 5-6% after the government notification on the new Drug Price Control Order (DPCO).

The new order will bring 652 drugs under price control and will enable the National Pharmaceutical Pricing Policy 2012 to regulate prices of 348 drugs covered under the National List of Essential Medicines (NLEM) 2011.

The DPCO proposes that retail price of 348 drugs will be fixed at the simple average price of brands that have more than 1 per cent market share.

The new price control is likely to reduce prices of many drugs in the domestic market and will definitely impact the growth and profitability of the companies in the immediate term, analysts say.

However, the analyst at Karvy Stock Broking believes that the companies with export bias and growth in regulated markets on back of niche and recurring opportunities will continue to outperform in the long-run.

Meanwhile, the BSE healthcare index, the largest loser among sectoral indices, is down almost 2% compared 0.36% fall in benchmark Sensex at 1509 hours.

Among the individual stocks, GSK Consumer Healthcare and Ranbaxy Laboratories have dipped 6% each at Rs 4,805 and Rs 443 respectively, while Lupin is down by 5% at Rs 767.

Wockhardt, Divi’s Laboratories, Dr Reddy’ Laboratories and Cadila Healthcare too, are down in the range of 2-3% on BSE.