Modi government may insist on giving priority to generics: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking):

The Modi government may pass a new law making it compulsory for doctors to prescribe only generic drugs. This is part of the effort of the current government to make healthcare more affordable to larger sections of the Indian population. Generics are the pharmaceutical combinations without the brand backing of a big international name. Currently, generic drugs already account for 80%of the Indian market and is expected to go up further to 90% by 2020.

However, there could be some practical problems to this announcement. If the doctor only prescribes the generic name, it will be left to the chemist to decide which particular brand to push. So the marketing focus of pharma companies will now have to shift from the doctor to the chemist. Most pharma experts believe that this change may be feasible in government hospitals but not on a pan-India basis. The last time the government had attempted something similar was under the Ajanta government in 1978. At that time, the idea had to be shelved after the pharma industry challenged the order in Court. Though, not yet fully out, in terms of policy, it definitely means that the pricing pressure on the Industry is here to stay. Overall logistics and implementation could be the key!

Source : Equity Bulls

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