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New US healthcare law a bitter pill for pharma ind
Global pharma major Dr Reddy’s Laboratories Ltd (DRL) expressed its concern over the replacing ‘Obamacare’ by a new law ‘American Health Care’ in the US and said it would pose risk to business that can have adverse material effect on financial performance. The Donald Trump administration has decided to repeal and replace The Patient Protection and Affordable Care Act (PPACA), popularly known as O
Replacing Obamacare or any change in trade pacts only increases uncertainty, business risk: Dr Reddy's Lab
Hyderabad: Global pharma major Dr Reddy’s Laboratories Ltd (DRL) expressed its concern over the replacing ‘Obamacare’ by a new law ‘American Health Care’ in the US and said it would pose risk to business that can have adverse material effect on financial performance. The Donald Trump administration has decided to repeal and replace The Patient Protection and Affordable Care Act (PPACA), popularly known as Obamacare.
Highlights:
- Trump defends GOP healthcare bill, blasts Obamacare
- US House of Representatives in March 2017 passed the ‘American Health Care Act’ to replace the PPACA (Obamacare)
- Dr Reddys sees a material adverse effect on business operations, financial condition
- several Indian pharma companies received warning letters from US FDA
Dr Reddy’s in a filing to US Securities and Exchange Commission (SEC), said: “Any changes in the PPACA, the Medicaid Part D program or other laws relating to drug pricing, coverage through Medicaid or Medicare, or other facets of the US healthcare market could have a material adverse effect on our results of operations, financial condition or business.”
Dr Reddy’s said that of late, several Indian pharmaceutical companies received warning letters from US FDA. “More recently, a number of Indian generic pharmaceutical companies were issued import alerts and warning letters by the USFDA. While our quality practices and quality management systems are conducted in a manner designed to satisfy these types of audits,
we can’t guarantee that our efforts will prevent adverse outcomes such as audit observations, corrective action requests, warning letters or import bans,” said Dr Reddy’s.A significant proportion of the company’s manufacturing base of active pharmaceutical ingredients and formulations plants servicing the US and other global generic markets is based out of India.
US House of Representatives in March 2017 passed the ‘American Health Care Act’ to replace the PPACA. The legislation is pending in the US Senate, and is anticipated to be significantly revised or substituted with new legislation before a final law is passed.
The company also said US FDA has increased its number of manufacturing site audits and regulators in other developed countries also in the same line of action. It could not guarantee that its efforts would prevent adverse outcomes, including warning letters or import bans.
Dr Reddy’s also said that Trump administration’s opposition to free trade agreements (FTAs) and ongoing efforts to achieve that goal as another risk factor. The company has cited a recent example of withdrawing from the Trans-Pacific Partnership (TPP) free trade agreement after Trump took over as president.
“Any such changes in free trade agreements could, among other things, interfere with free trade in goods, impose additional customs duties or tariffs, increase the costs and difficulties of international transactions and potentially disturb global business,” said Dr Reddy’s.
By Business Bureau
