Outlook : Pharma Sector by Aditya Khemka
Pharma Outlook by the sector veteran Aditya Khemka Twitter Handle: @shuchi_nahar Pharma business is divided into two models: Domestic Export Domestic Model This model is typically like an FMCG business. In domestic markets, those pharma companies that have branding power will have a good pricing power among other competitors. In pharma, doctors are the main customer of the product and the patient is just a consumer. The patient is going to follow what the doctor suggests and he will prefer only those drugs that will be suggested by a doctor, he won't switch to a generic drug if he is not getting the brand prescribed to him. Export Model This model is basically like a steel business. A demand curve is almost always downward-sloping, reflecting the willingness of consumers to purchase more of the commodity at lower price levels. The pharma demand curve is going to be straight, so the question here is what will determine the price? The answer is simple, supply will determ...