Page 150 - CW E-Magazine (2-7-2024)

Pharmaceuticals

INDUSTRY TRENDS
Domestic pharma formulations market to be worth

Rs. 5.5-trillion by 2034: Report

The domestic pharmaceutical There will be consolidation in the medical representative rationalisation
formulations market will be worth pharmaceutical segment and of the and reduction in free samples and doc-
Rs. 5.5-trillion by 2034 by growing at a 3,000-odd companies, the long tail will tor-related expenses, said the report, re-
compound annual growth rate (CAGR) shrink over the next fi ve-odd years, ferring to earnings before interest, taxes,
of 10 percent, said investment banker driven by factors including generational depreciation, and amortisation.
Avendus Capital in a report, noting change, he said.
companies have scope for growth in The report noted that the industry’s
smaller towns and rural areas. Attracting investments dynamics and margins would adjust to
Mr. Prasshanth Hari, Director – the new generics reality. “Pharma players
It predicted a shift from doc- Healthcare Investment Banking, Avendus are likely to expand their portfolios
tor-branded prescriptions to a more Capital, pointed out that the domestic by either shifting focus to new chronic/
diversifi ed marketing mix that is driven formulations sector had attracted large lifestyle therapies or expanding into
by strict quality regulations and stream- strategic and private equity investments adjacencies like Over-the-Counter
lined supply. “Despite India’s repu- in deals worth $14-billion-plus over (OTCs), Point-of-Care Diagnostics,
tation as the pharmacy of the world, the last six years. “We estimate that MedTech and nutraceuticals,” the
there is signifi cant under-penetration the market would continue growing report said, adding that the pharma
in the domestic market, especially in at 9-10 per cent CAGR over the next companies have already launched
Tier II/III+ towns and rural areas,” said 10 years,” he said. OTC divisions.
Mr. Anshul Gupta, Managing Director
and Head of health care investment Trade generics (TGx) and Jan Aus- Indian companies may refocus on
banking at Avendus Capital. As the hadhi Kendra, government-run stores, the domestic market as the health care
country progresses, “the resultant eco- are expected to contribute approximate- market in the United States stabilises
nomic prosperity will bode well for conti- ly 30 percent to pharmaceutical volume and a “patent cliff” emerges, said the
nued growth of this sector,” the report in the next decade, according to the re- report, referring to expiration of patents
said. There will be some fundamental port. Despite this shift, branded generics for branded products, opening the door
shifts in the $25-bn domestic pharma- (BGx) are projected to retain 65-70 per- for competitors to introduce generic ver-
ceuticals market, driven by government cent of the market value with a CAGR of sions at lower prices. Emerging markets
policies among other things, and com- more than 8 percent. The channel shift in Latin America, Africa, Russia, and
panies will have to make changes from may result in moderate ebitda margin Southeast Asia are also attracting Indian
the way they have done business all contraction, which could be mitigated pharmaceutical giants due to their faster
along, said Mr. Gupta. by cost optimisation measures such as growth rates.

TRADE TRENDS
APIs imports up by over 13% in April-May

Imports of active pharmaceutical Exports Promotion Council (Pharmexcil), take time to kick in, but it is a move in
ingredients (or bulk drugs) in the fi rst two in April and May, the country im- the right direction. Not just for APIs but
months of FY2024-25 grew by 13.06 ported bulk drugs worth $1.44-bn, up Indian companies depend on China for
percent because of lower prices, accord- from the $1.27-bn in the same months key starting materials, chemicals, solvents,
ing to a report in the Business Standard last year. etc. Therefore, one thing or the other
newspaper. Indian pharma fi rms are gets imported,” said Mr. Uday Bhaskar,
stocking up APIs while prices stay low, In May alone India imported bulk drugs Director General, Pharmexcil.
according to industry observers. and intermediates worth $763.43-mn,
up 8.67 percent. “Benefi ts of a pro- API prices have cooled in the last two-
As per data from the Pharmaceutical duction linked-incentive (PLI) scheme three months. As per the report, prices

150 Chemical Weekly July 2, 2024

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