Cancer Drugs Impact: Pharma Stocks Soar with GST Cuts and BIOSECURE Act Passage

Cancer Drugs and Market Reactions

Shares of pharmaceutical companies as well as contract drug manufacturing companies (CDMOs) experienced significant gains in intraday trade on Tuesday, after a double dose of good news on the domestic and US market front. On Monday, the 54th GST Council of India reduced the GST rate on cancer drugs, including Trastuzumab Deruxtecan, Osimertinib, and Durvalumab, from 12% to 5%. Earlier, the government removed the basic 10% customs duty on these drugs in the Union Budget of 2024.

Impact of GST Cuts on Pharma Stocks

Trastuzumab Deruxtecan is pivotal for breast cancer and non-small cell lung cancer (NSCLC) treatments, while Osimertinib targets NSCLC with specific gene mutations. Durvalumab is employed for various cancers, enhancing treatment options substantially. Post-announcement, Astrazeneca India's share price increased by 4.3% at Rs 7,069 in intraday trade on BSE, benefiting from its local manufacture of the three drugs. Alembic Pharmaceuticals' stock surged 2.6% to Rs 1,236.

BIOSECURE Act: A Game Changer

Furthermore, Indian CDMO stocks rallied due to the US House of Representatives passing the BIOSECURE Act. The bill addresses US biopharmaceutical dependence on China, creating opportunities for Indian companies to step into this supply gap. Stocks of Laurus Labs rose 5.55% to Rs 517.90, while Akums Drugs and Pharmaceuticals saw a 5% jump to Rs 910.55, and Piramal Pharma soared by 5.80% to Rs 229.70.

Market Outlook

As the market responds to these pivotal developments, industry analysts highlight that Indian CDMOs, benefiting from government incentives and manufacturing cost advantages, are well-positioned to seize the growing demand in cancer therapeutics.