India's GlaxoSmithKline Pharma's pre-tax profit falls on government pricing caps

India’s GlaxoSmithKline Pharmaceuticals reported an 8.6 per cent fall in its pre-tax profit for the fourth quarter on Wednesday (May 17), hurt by the government’s curbs on pricing of some essential medicines.

Consolidated profit before tax dropped to 1.90 billion rupees (S$30.9 million) for the quarter ended March 31, from 2.08 billion rupees a year earlier, the Indian unit of UK’s GSK said in an exchange filing.

Revenue from operations at the maker of Augmentin antibiotic and T-Bact ointment fell 2.7 per cent to 7.87 billion rupees.

“A robust underlying volume growth was offset by the impact of National List of Essential Medicines (NLEM) 2022,” the company said.

GlaxoSmithKline’s Ceftum and T-Bact, used to treat bacterial infections, were included in the NLEM list, which mandates those medicines to be sold below a price ceiling set by a government pricing body.

In March, the company said the revenue share of drugs impacted by the pricing cap was at 42 per cent so far in 2023, up from 33 per cent in 2022.

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The company plans to mitigate the impact of the price caps by boosting sales volumes of its Ceftum, T-Bact and Augmentin.

Separately, the company recommended a dividend of 32 rupees per share.

Shares of the drugmaker closed 0.43 per cent higher before the results, compared with a 0.45 per cent fall in the benchmark Nifty Pharma index. REUTERS