Expenses Rise for Pharma Companies

Oct 07, 2013

The Economic Times

Pharmaceutical companies are experiencing financial strife with a recent rise in expenses. Many of these expenses are due to increased regulatory compliance, escalated costs for filing drug applications in overseas markets and heightened marketing costs. Many of these expenses get lumped into the "other expenses" category. Companies affected by these changes include Sun Pharma, Ranbaxy, Dr Reddy's, Glenmark, GSK, Divi's,Alembic, Ipca Labs, Strides Arcolab, Dishman Pharma, Torrent and Aurobindo Pharma

Many of these companies are based in India. This all comes amidst reports from experts that estimate the Indian pharma market will reach $56 billion by 2020. Some believe the FDA and regulatory commissions are taking a harder look at Indian pharma as a result.

Ranbaxy, one of the companies facing escalated expenses, has experienced a 30% increase in costs related to a consent decree signed with the FDA. The company has only experienced a rise in revenue of 19.8%, however.

Other expenses include legal costs, issues regarding existing patents, infringement cases, settlements for related issues and the rising cost of compliance. As the FDA cracks down on regulation of Indian pharma, they in turn, are breaking the bank for said companies as well. Read more. 

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