Indian pharma industry facing growth headwinds: ICRA

By: |
New Delhi | December 08, 2016 6:07 PM

Indian pharmaceutical industry will grow at a slower pace due to sluggish growth in the US market, increased competition leading to price erosion in high single digits and generic adoption reaching saturation levels, rating agency ICRA said today.

"In spite of these ongoing challenges, several Indian pharma companies are increasing their R&D spend, targeting pipeline of specialty drugs, niche molecules and complex therapies," ICRA said. (Reuters)“In spite of these ongoing challenges, several Indian pharma companies are increasing their R&D spend, targeting pipeline of specialty drugs, niche molecules and complex therapies,” ICRA said. (Reuters)

Indian pharmaceutical industry will grow at a slower pace due to sluggish growth in the US market, increased competition leading to price erosion in high single digits and generic adoption reaching saturation levels, rating agency ICRA said today.

Growth from the US has come down to less than 9 per cent in first half of 2016-17 despite consolidation and currency benefits and going forward, the growth momentum is likely to face further pressure, it said.

Besides, increased regulatory scrutiny and consolidation of supply chain in the US market resulting in pricing pressure along with increased R&D expenses will have an impact on profitability of Indian pharmaceutical companies, it added.

“In spite of these ongoing challenges, several Indian pharma companies are increasing their R&D spend, targeting pipeline of specialty drugs, niche molecules and complex therapies,” ICRA said.

The domestic pharmaceutical industry has gained adequate scale and drug development capability over the last decade of growth, which will keep it in good stead to capture new opportunities in the US market, it said.

On overseas markets, the rating agency said the operating environment in emerging markets (EMs) like Latin America, CIS countries and South Africa has been affected by confluence of factors, including devaluation of currency, a frequently evolving regulatory landscape and a weakening macro environment.

“Select pharmaceutical companies have taken sizeable write-offs in Venezuela due to currency devaluation and have stopped despatches there on the back of repatriation issues,” it said.

On the domestic front, ICRA said continued regulatory interventions are expected to put some pressure in the near term though long term growth prospects remain healthy, given increasing penetration, accessibility and continued new launches.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1IOB net soars 143% to Rs 350 cr in Q4; plans to raise Rs 2,000 cr
2Airtel, Ericsson demo over 1 GBPS throughput on live 5G trial network in Gurgaon’s Cyber Hub
3RBI proposes uniform regulatory framework for microfinance sector