Indian drug firms to see moderation in growth in US

The Dollar Business Bureau

Rating agency ICRA on Thursday said that the Indian pharmaceutical industry will witness moderation in growth due to slow down of business in the US with a decline in the volume of large size drugs going off patent, increasing competition and adoption of generics reaching a saturation level.

Over the last 10 years, the Indian pharmaceutical companies have witnessed a strong growth driven largely by the US market.

"However, the growth from the US market has been down to 15 percent in financial year 2015-16 and looking forward the momentum for growth is possibly to face more pressure," ICRA (Investment Information and Credit Rating Agency of India) said in a statement.

The Indian drug companies will have an impact on their profitability due to increase in regulatory inspections and amalgamation of supply chain in the US, which can result in pricing pressures, it said.

The rating agency noted that despite these challenges, various Indian drug firms are enhancing their spending on R&D, targeting a pipeline of niche molecules, specialty drugs and complex therapies.

On Indian market, the agency said that continuous interventions from regulatory bodies are likely to put a little pressure in the near future but growth prospects in the long-term for local drug market continues to be healthy, in the wake of growing penetration, accessibility and continuous launching of new products.

"The major concern for domestic drug market is the constant regulatory interventions in the form of extended list of NLEM (National List of Essential Medicines) in addition to current ban on 344 drugs of fixed dose combination," it added.