Sanford Bernstein: Expect price erosion to heighten on YoY basis

In our special segment, ‘Quarter Se Quarter Tak’, Nithya Balasubramanian, Director of Sanford Bernstein discusses the expectations from the pharma sector in the third quarter.

Balasubramanian said, “I am expecting price erosion to be heightened on a year-on-year basis this quarter as well. If you go back to the biggest reason why we are seeing this heightened deflation is actually because of higher inventory levels in the channel and if you look at the large retailers' inventory levels, it does seem at least last quarter, it seems still slightly above pre-COVID levels. This means this quarter again as the inventory is normalising we are likely to see sustained deflation.”

She added, “I am hopeful that starting 2022 this trend should reverse because inventory levels should have normalised and I am not seeing anything structurally that is likely to keep deflation at a higher number. So I am hoping on a year-on-year basis 2022 will look much better than 2021.”