December quarter earnings of pharmaceutical companies may see incremental improvement helped by a favourable base and steady domestic business. But if the drug approvals trend in the US is anything to go by, pricing pressure in the key market is unlikely to abate anytime soon. As approval rates gathered pace and increased competition eroded prices, earnings of domestic pharmaceutical firms came under pressure, forcing reorganization of their US businesses. With new business lines yet to acquire scale, the generic drugs business remains core to the companies’ earnings. On the positive side, competition and price erosion have triggered a rethink among firms.

(Live Mint)