The drug was quoting at around $18,000 to $25,000 per kg (depending on the volumes involved) just a few months ago.

Though drug exporters say the falling prices will not affect their projections, experts say this may serve as an effective deterrent for new entrants.

The Drugs Controller General of India had, in June, cleared sildenafil citrate export licences of four companies -- Orchid Chemicals, Cipla, Ranbaxy Labs and Hetero Drugs -- though the list of aspiring exporters had been growing each day.

While Orchid Chemicals' first consignment of the product is expected to be shipped next week, Mumbai-based Cipla has already exported its first batch of the drug, though pricing details of both the exporters could not be ascertained.

As on June 5, export licences amounting to 39,262 kg and 5,000tablets of sildenafil citrate were cleared by the drugs controller general.

"Now that the initial euphoria over sildenafil citrate has died down, the current prices of $7000 per kg seem more realistic. Besides, increased competition will bring down prices, though we must admit that there had perhaps been an over-estimation of demand," one manufacturer said.

Significantly, one leading exporter said that the average realistic price of the drug was between $10,000 and $12,000 per kg and refuted claims of a crash in prices.

However, industry experts add that demand for the product is expected to pick up as Viagra patent-holder, Pfizer, registers the drug in more countries.

"Viagra is understood to have received registeration in several European markets, and this is expected to facilitate a stabilisation of demand," they said.

Analysts add that some local companies may also re-evaluate their sildenafil citrate export plans in the "new price scenario" given that several smaller bulk-drug units fromHyderabad are expected to enter the market, pulling down prices further.

Significantly, international prescriptions for Viagra itself have reportedly fallen consistently to 85,000 in the week ended August 21, compared with 2,79,000 in the week ended May 8. Refills of the blue diamond-shaped pills have apparently been more or less flat in early July.

INSIGHT

More than the drop in prices, what is a real cause for concern is the gradual decline in prescription levels. Further, refills have also been stagnant, indicating that the demand for the product has not been sustained. Growth will come from the entry of Pfizer in new markets, which, going by past trends, will be short-lived. As for local players, their realisation will still be high at the current price levels considering that small manufacturers still find the product investment-worthy.