Drug companies can't rely on extreme price hikes in US: Glen Saldanha

MUMBAI: Indian generic drug companies that have built billion-dollar businesses by venturing into the US market may have to taper their expectations on pricing. The US market, which has no price control, will not be the same going forward, with an uproar over exorbitant price increase spooking several drug makers. "We don't see extreme price increase as a possibility going forward," Glen Saldanha, managing director of Glenmark Pharma, told ET.
Saldanha's comment comes at a time when the US Department of Justice (DOJ) has filed charges against a few Indian companies, along with several others, alleging price collusion. Sun Pharma, its US subsidiary Taro, Dr Reddy's, Aurobindo Pharma and Heritage Pharma, which is the US subsidiary of Emcure, have been named in the DOJ report. These companies have al legedly increased the prices of certain drugs by six times in a span of one year. Glenmark, though, is confident of 16-17% growth for the company in markets like the US, driven by specialty generics.

"We have not been named in any DOJ investigation, however I think it is time for companies to focus on specialty segments instead of relying solely on price hikes for future growth," said Robert Matsuk, president North America, at Glenmark.

Brokerage firms that were bullish on Indian drug makers are also feeling the jitters of the DOJ investigation and the threat of free market pricing that might dent the gold rush.