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Glenmark and Cipla ride the wave of COVID treating drugs

Updated: Jul 31, 2020

- By Jasnoor and Vansh|

The Covid-19 pandemic has given a set back to the economy but the pharmaceutical industry stands to gain a lot. Glenmark Pharmaceuticals Ltd and Cipla Ltd have seized the opportunity with the launch of the first COVID- 19 treating drugs in India. These companies have undertaken significant research in diagnostics, treatment, and prevention of the virus. As a result, they experienced a huge rise in share prices, putting them in the limelight.

Fabiflu, launched by Glenmark, and Cipremi, launched by Cipla made their share price jump by 35 percent and 4 percent respectively. The recent announcement of the vaccine updates helped the Pharma Index to end its 5 years of underperformance, wherein the index had lost around 55 percent of its value. The Pharma Index jumped over 2 percent after Glenmark and Cipla got permission from the Drug Controller General of India (DCGI). Their stock price is now expected to be consolidated because the bullish buyers have exhausted their power and also due to the limited relaxations available for exports. Glenmark launched the antiviral drug favipiravir under the brand name FabiFlu initially at ₹103 per tablet which has now been reduced to ₹75 per tablet.

Hetero Healthcare, Mylan Pharmaceuticals and Cipla Ltd have launched the generic version of the remdesivir. The patent holder of this remdesivir is a USA based biopharmaceutical company Gilead Sciences. However, Cipla has taken a lead in the same by pricing the drug at ₹4000 whereas Hetero Healthcare and Milan have fixed the maximum retail price at ₹5400 and ₹4800 respectively. Thus, Cipla and Glenmark have made a remarkable start in the COVID-19 treating drugs.

With the acceleration in the number of Covid-19 positive cases in India, healthcare would experience a massive burden and the role played by such drugs might play a crucial role. Many other companies are also working on the same. Certain companies such as Jubilant Pharma, Cadila Healthcare, and Dr. Reddy's Laboratories are also in line of launching this remdesivir soon. However, these drugs have been considered only as a positive development and not a game-changer.

The pricing and availability of drugs are vital because the country has experienced unemployment and pay cuts recently. Whether these drugs would be available to each and every section of the society at an affordable price is the question of the hour. Would the government, which is currently going through the loss of revenue, be able to subsidize them significantly or not will also play a crucial role.

The company that would shine out in the process would be the one that fulfills the requirements of price, availability, access, and most importantly effectiveness of the medicine. We might experience certain game-changing discoveries in this field ahead which would lead to an exponential growth of those companies. Thus, Cipla and Glenmark might have attained the first mover advantage but for having sustainable stock prices in the long run, they would have to win the export race as well.


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