Lahore, The Lahore High Court has lifted the order against the deregulation of maximum retail prices (MRPs) of non-essential drugs, marking a significant shift in the pharmaceutical industry's pricing strategy and potentially boosting sector profitability.

According to JS Global, the court's decision comes after the outgoing government's approval of deregulation, allowing pharmaceutical companies to adjust prices independently. This move deviates from the previous drug policy, which linked price adjustments to the Consumer Price Index (CPI) and involved government regulation. The policy change, recommended by the previous Ministry of Health, aims to address supply-side issues and is seen as a potential enhancer of the industry's profit outlook.

The report suggests that pharmaceutical firms with a substantial share of revenue from non-essential drugs, defined as exceeding 50%, are poised for notable financial improvement. Companies like AGP, ABOT, HINOON, and HALEON, where non-essential drugs constitute a majority of their sales, are identified as key beneficiaries of the deregulation. Additionally, GlaxoSmithKline and Searle, despite having a smaller percentage of non-essential drugs in their sales mix, are also expected to gain from the policy shift.