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Pharma 2019: Hopes up for Indian companies delivering on better earnings

Even though pricing scenario in US, a key market for Indian pharma, is stabilising, the proportionate positive impact on earnings is yet to fully reflect for most of the leading Indian pharma companies. Stabilisation here means the pricing pressure that Indian companies had been coping with in the US for the past few years is finally not worsening. While the companies are still finding their base portfolio (main drugs they launched about a year ago) getting eroded, the decline is being reduced now. Analysts put the decline between 8 and 10 per cent as against 10-12 per cent each year earlier (even last year).

Some obvious reasons, analysts say, are that their R&D investments have also remained at the same level or as some may say, "also stabilised" and new product launches are taking time to yield returns and those launched are not giving the desired returns. All of it is putting pressure on earnings at the moment for most leading players from biggest Indian players Sun Pharma to Lupin, Cadila, Dr Reddy's, and more. Sun Pharma has an added dimension of changing its model and moving towards specialties as against generics, entailing higher R&D spending and related costs associated with it in the marketing.

 

https://www.businesstoday.in/sectors/pharma/pharma-2019-hopes-up-for-indian-companies-delivering-on-better-earnings/story/307034.html