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Graphic: Naveen Kumar Saini/Mint (Naveen Kumar Saini/Mint)
Graphic: Naveen Kumar Saini/Mint
(Naveen Kumar Saini/Mint)

Chart of the day | Bitter pill

Implementation of National List of Essential Medicines, 2011, to impact earnings of drug makers

If the National List of Essential Medicines, 2011, is implemented, as much as 24-29% of domestic revenue of some large companies will come under price control, Barclays Research has estimated. Currently, only 2.5-6.8% of local revenue is under price control under the Drugs (Prices Control) Order, 1995. While it’s still early to determine the impact on earnings because different pricing mechanisms are being debated, Barclays analysts say earnings of the first four companies in the table could be hit by between 2% and 8.7%, with Cadila Pharmaceuticals Ltd expected to be the most affected and Dr Reddy’s Laboratories Ltd the least.

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