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September, 2006 Pragati Maidan, New Delhi, India |
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Pharma firms take profits hit.
A mix of value- added tax, MRP- based excise and fierce competition in the overseas markets have pounded Jan- March 2005 quarter profits for pharma majors.
The advent of the new product patent regime has made an increase in R&D revenue a necessity. Other expenditures for most top pharma companies have increased by 16.12% to Rs7237mn while total expenditure decreased by 3% to 1.78bn.
Other than R&D spending, cost of regulatory filings in the overseas market and marketing expenses abroad are the key factors in driving down margins.
Amongst the five top companies Nicholas Piramal was worst hi, posting a loss of Rs134mn compared to a profit Rs775mn in Jan- March 2004. The company also lost 6 weeks of sales as wholesalers delayed buying drugs de to confusion about the VAT regime.
Only Cipla bucked the Trend, as higher overseas balance made up for lower domestic sales.
Date: 02-May-2005
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