Shares of nine pharma companies dropped by 1.4% to 6.03% at 11:05 IST on BSE after reports suggested that prosecutors at the US Federal Reserve may bring charges of price collusion against a group of generic drugmakers before the end of the year.
Meanwhile, the S&P BSE Sensex was down 83.76 points or 0.31% to 27,346.14.
Glenmark Pharmaceuticals (down 5.24%), Aurobindo Pharma (down 2.96%), Strides Shasun (down 4.24%), Cipla (down 1.4%), Dr Reddy's Laboratories (down 4.72%), Cadila Healthcare (down 3.57%), Lupin (down 3.87%), Divi's Laboratories (down 1.8%), and Sun Pharmaceutical Industries (down 6.03%) declined.
A report suggested that the US Department of Justice had started the investigation two years ago, and the list included a dozen drug companies such as Sun Pharmaceutical Industries, Taro Pharmaceutical Industries and Mylan. Charges could come up as early as December 2016, it added.
Generic drugs are supposed to keep healthcare costs down. But the US government may claim that these companies worked together to keep prices higher instead of allowing market competition to set pricing, report noted.
The BSE Healthcare index had underperformed the market over the past one month till 3 November 2016, falling 4.06% compared with 2.88% fall in the Sensex. The index had also underperformed the market in past one quarter, dropping 1.91% as against Sensex's 0.96% fall.
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