Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Will US budget aid Indian pharma?
Thu, 25 Apr Pre-Open

Recently, Barack Obama - the US president had presented the budget for fiscal 2014. It's a known fact that Indian pharma companies have a sizeable presence in the US pharma market. Among various proposals, one of the proposal states that the USFDA should strengthen the safety of drugs especially the ones imported in United States. So what does it mean for Indian pharma companies?

As per the budget the United States Food and Drug Administration (USFDA) have been allocated US$ 4.7 bn. This amount also includes US$10 m to hire new resources in order to improve the safety of food and medical products, which are imported in the United States. The amount should be utilized to take various measures where FDA has higher presence especially in countries like China. This proposal is positive and negative for Indian companies

  • Positive - Speed up drug approval process. Last year the USFDA, had imposed Generic drug user fees amendment (GDUFA). As per this regulation, a generic company will have to provide user fees to supplement the costs of reviewing generic drug applications and inspecting facilities. This will also ensure timely review of applications for generic drugs. Due to this action, though the costs pertaining to research and development of the companies have increased a bit, the approval process is expected to be faster than earlier. The budget proposal to add new resources will seemingly further speed-up the approval process.

  • Negative - Strict regulatory control. Though the budget explicitly says that the imports should be under strict regulatory control especially from China, it does not mean that Indian drug companies will be overlooked? Greater focus on Chinese imports looks like good news, but at the same time Indian firms cannot be deemed to be safe. Even Indian companies would come under stricter scrutiny. One should note that many Indian companies have witnessed several warning letters and also drug recalls. With a greater USFDA presence, Indian companies will have to remain more cautious in following the GMP (Good manufacturing practices) norms.
Thus, the way things will eventually shape up looks difficult to predict right now, we believe the positive in the form of faster approval is likely to outweigh most of the other negatives.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Will US budget aid Indian pharma?". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.