New drug pricing may hit Dr Reddy's revenues

Govt recently enacted National Pharmaceuticals Pricing Policy, according to which hundreds of essential medicines were subjected to price controls in the country

The National Pharmaceuticals Pricing Policy, 2012, being implemented by the government, may impact Dr Reddy’s Laboratories revenues bythree to five per cent from India, the city- based drug maker said. In a filing with US Securities and Exchange Commission, the company also said some of the provisions of European Falsified Medicines Directive may cause delayed exports to European Union.

India recently enacted the National Pharmaceuticals Pricing Policy, 2012. As a result, hundreds of drugs on India’s national list of essential medicines were identified and subjected to price controls in the country.

On May 15, the pharmaceuticals department released drugs (price control) order, for the price control mechanism for 348 drugs in the national list. In this, the price  of a drug is determined on the average of all drugs having market share of over one  per cent by value.

The individual drug price notifications are being released in a phased manner by the National Pharmaceutical Pricing Authority.