INSUBCONTINENT EXCLUSIVE:
Investors in Indian pharma companies may have become tolerant of the patent law suits and FDA clampdowns, bu
t
there is a steadily
in investing in pharma stocks
Price collusion, pay-fordelay arrangements and manufacturing malpractices are the issues that potentially invoke litigations involving these
anti-trust law suit in the US against 18 generic pharma companies alleging price cartelisation
It is touted to be the largest cartel case in the history of the US
As per a report by Bloomberg Intelligence, the drug pricing battleground in the US has shifted from Washington DC to include the 50 states
For instance, the new governor of California is making drug pricing a key issue.
Till now, there has been limited material impact of
litigations on Indian pharma companies but the cost and settlement of such a litigation has the potential to be a key factor impacting the
In the past, European and American drug firms have paid significant amounts towards damages or settlement of similar suits
Price fixing is a criminal offence and can result in huge punitive costs for the implicated companies.
According to a report by global
investment research network SmartKarma, while there is not enough information to apportion potential liability of a company, among the
caps and exposure to the US market
record.
Unprecedented increases in drug prices prompted state investigations into the practices of generic pharma companies
It has led to anti-trust suits by the states as well as class-action suits by patient groups against the drug companies in the US
The US FDA through its whistle blower policy too offers generous incentives to employees of pharma companies for revealing malpractices in
their companies to the regulator
Investors in Indian pharma are in for a surge in their risk appetite.
