November 26, 2015
Time: 6.45 pm
Sector Focus: Pharma sector:
We spend lot of money for various things. But we pay only for what we get, we do not over pay for anything. Particularly Indians are price conscious people. They just do not pay high prices even for branded goods. That applies to very good brands like Apple. Recently Apple 6 phones were sold at higher prices and immediately sales went down and they had to cut the prices.
As for as I know, we pay highest price per gram only for Gold. It is about Rs 2500 per gram. There is no other product for which we pay more than Rs 2500 per gram. Buying gold is savings.
When it comes to consumables, even 'saffron' is not priced at over Rs 2500 per gram.
But do you know that we are paying more than Rs 2500 per gram when it comes to tablets?
Though tablets look big, if you see closely, it is only 10 mg or 20 mg (in some cases it is 1 mg or 2 mg) of chemicals. The rest are wastes to give shape to the tablets. The tablet for Sugar problem I am taking is 2 mg tablet which cost about Rs 10 per tablet. That means we pay about Rs 5000 per gram.
This is not a tablet we take once in a while, this is a regular tablet one needs to take.
According to a study about 25% of the population have sugar problem.
Recently, a US company, Gilead, came to focus for selling a tablet for Hepatitis C. A strip of 84 tablets is being sold at US$84000. That is a whopping Rs 60 lakhs just for 84 tablets. Do you know that the same tablet is available in India for less than Rs 1 lakh?
Another company, bought a particular tablet making rights from another company and hike the prices overnight from US$13.50 to US$750.
Stents are used for heart attack patients in India, hospitals charge anywhere between Rs 1.2 lakhs to Rs 1.5 lakhs for this stent. Do you know that the same is available in Europe for less than Rs 30000.
Can you imagine we pay more than 4 times than European?
My doctor has given a tablet for controlling cholesterol which I am buying at R7 per tablet. The same chemical formula, in generic market, tablets are available form Rs 1 per tablet to Rs 20 per tablet.
Do you know that some cancer tablets which costs Rs 1.2 lakhs in markets is available for Rs 3500 in Generic tablets? But your hospital or doctor will not agree for generic tablets. These branded drugs pay lot of commission to the hospitals.
Did we hear corporate hospitals 20 to 30 years back? In those days we had only charitable hospitals.
So these examples show the status of Pharma companies not only in India also about the whole world.
Sun Pharma shares shot up from Rs 100 per share in 2008 (after the stock market crash) to 1200 in 2015, a return of 1200% in a period of 7 years. Auro Pharma was quoted at Rs 60 three years before, now trading at Rs 800 plus. (Prices are adjusted for stock split and bonus)
In the last 2 yeras only two sectors did very well. One auto components and the other is Pharma sector.
Now online sales of drugs commenced but yet it is not like other consumer durables, we still can not buy without medical prescription.
Few years before 'Subiksha' tried to sell medicines at 10% discount which faced lot of difficulties and the company failed. Now online stores are offering 15% discount. Awareness is being created about looting by these branded Pharmas and even Govt. is also stepping in many cases.
Rajastan govt. has decided to buy cancer drugs is bulk at Rs 3500 per stripe and distribute free to the patients whereas private hospitals charge Rs 1.2 lakhs for the same stripe.
Central Govt. has opened pharmacies in Govt. hospitals like AIIMS to sell stents and other costly medicines at 50 to 60% cheaper.
But a country like India with 1.2 billion people, which is getting health conscious ( about 30 years before average life period of an Indian male was 54 and now it is over 75), paying through insurance has become a norm, corporate hospitals coming up even in tier 2 and tier 3 cities, the magnitude of the problem is very high, some measures here and there is just a like a drop in the ocean.
Time: 6.45 pm
Sector Focus: Pharma sector:
We spend lot of money for various things. But we pay only for what we get, we do not over pay for anything. Particularly Indians are price conscious people. They just do not pay high prices even for branded goods. That applies to very good brands like Apple. Recently Apple 6 phones were sold at higher prices and immediately sales went down and they had to cut the prices.
As for as I know, we pay highest price per gram only for Gold. It is about Rs 2500 per gram. There is no other product for which we pay more than Rs 2500 per gram. Buying gold is savings.
When it comes to consumables, even 'saffron' is not priced at over Rs 2500 per gram.
But do you know that we are paying more than Rs 2500 per gram when it comes to tablets?
Though tablets look big, if you see closely, it is only 10 mg or 20 mg (in some cases it is 1 mg or 2 mg) of chemicals. The rest are wastes to give shape to the tablets. The tablet for Sugar problem I am taking is 2 mg tablet which cost about Rs 10 per tablet. That means we pay about Rs 5000 per gram.
This is not a tablet we take once in a while, this is a regular tablet one needs to take.
According to a study about 25% of the population have sugar problem.
Recently, a US company, Gilead, came to focus for selling a tablet for Hepatitis C. A strip of 84 tablets is being sold at US$84000. That is a whopping Rs 60 lakhs just for 84 tablets. Do you know that the same tablet is available in India for less than Rs 1 lakh?
Another company, bought a particular tablet making rights from another company and hike the prices overnight from US$13.50 to US$750.
Stents are used for heart attack patients in India, hospitals charge anywhere between Rs 1.2 lakhs to Rs 1.5 lakhs for this stent. Do you know that the same is available in Europe for less than Rs 30000.
Can you imagine we pay more than 4 times than European?
My doctor has given a tablet for controlling cholesterol which I am buying at R7 per tablet. The same chemical formula, in generic market, tablets are available form Rs 1 per tablet to Rs 20 per tablet.
Do you know that some cancer tablets which costs Rs 1.2 lakhs in markets is available for Rs 3500 in Generic tablets? But your hospital or doctor will not agree for generic tablets. These branded drugs pay lot of commission to the hospitals.
Did we hear corporate hospitals 20 to 30 years back? In those days we had only charitable hospitals.
So these examples show the status of Pharma companies not only in India also about the whole world.
Sun Pharma shares shot up from Rs 100 per share in 2008 (after the stock market crash) to 1200 in 2015, a return of 1200% in a period of 7 years. Auro Pharma was quoted at Rs 60 three years before, now trading at Rs 800 plus. (Prices are adjusted for stock split and bonus)
In the last 2 yeras only two sectors did very well. One auto components and the other is Pharma sector.
Now online sales of drugs commenced but yet it is not like other consumer durables, we still can not buy without medical prescription.
Few years before 'Subiksha' tried to sell medicines at 10% discount which faced lot of difficulties and the company failed. Now online stores are offering 15% discount. Awareness is being created about looting by these branded Pharmas and even Govt. is also stepping in many cases.
Rajastan govt. has decided to buy cancer drugs is bulk at Rs 3500 per stripe and distribute free to the patients whereas private hospitals charge Rs 1.2 lakhs for the same stripe.
Central Govt. has opened pharmacies in Govt. hospitals like AIIMS to sell stents and other costly medicines at 50 to 60% cheaper.
But a country like India with 1.2 billion people, which is getting health conscious ( about 30 years before average life period of an Indian male was 54 and now it is over 75), paying through insurance has become a norm, corporate hospitals coming up even in tier 2 and tier 3 cities, the magnitude of the problem is very high, some measures here and there is just a like a drop in the ocean.
Comments
Sir,in future sector will give returns or pharma pharamapharmas like telecom sector?
ReplyDeleteIn coming decade which theme will be give decent return.for example between 1990s & still now IT sector made a bull run. Hereafter if I am not wrong IT will not give that much return.
So in your point of view which theme or sectors will play a big role in coming decades.
Liquors,logistics???
Before 2000, it was IT, between 2003 and 2007 bull run, it was Infra, between 2008 and 2015 bear run, it was Pharma. Now you can see all pharma stocks are correcting. In the last two years it was Auto components. What is next? Honestly telling you it will be very difficult to predict (if I can, then by this time, I would be a multi millionaire)
ReplyDeleteChances are high for following sectors:
1. ecommerce (right now valuations are very high, no listed company)
2. Defense related (if Make in India really takes of)
3. Transport (Crude will be down for next 10 years).
Currently Pharmaceutical Marketing Sector is definitely doing good. What are the predictions is it continue at the same position in the coming years or there are chances of drop off?
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