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    Pharma Exports to witness a steep fall in terms of growth:Crisil

    Written by savita thakur thakur Published On 2016-05-18T12:59:30+05:30  |  Updated On 18 May 2016 12:59 PM IST
    Pharma Exports to witness a steep fall in terms of growth:Crisil

    Mumbai : The pharmaceutical sector is heading for a tough time as exports growth in formulations (in US dollar terms) is expected to almost halve to 10-12 per cent annually over the next five years, a report said.


    "Exports growth in formulations (in US dollar terms) is expected to decline sharply to 10-12 per cent annually over the next 5 years, compared with a growth of 19 per cent seen in the last decade," Crisil Research said in its report here.


    Exports of generics have been the growth engine of the industry for a long while now, but the script is changing because the value of drugs going off-patent is declining even as pricing pressures are increasing, it said.


    The annual sales growth of generic drugs in the US, the largest generics market, is seen slowing to 8-9 per cent over the next five years, and decelerate even more after that.


    Therefore, for growth to sustain beyond 2020, domestic companies will have to step up investments in new molecules and draw up a roadmap to deal with lower generics growth, it said.


    Competition has been intensifying, particularly for the large players, because of the huge number of abbreviated new drug applications (ANDAs) being filed with the US Food and Drugs Administration (USFDA), including by mid-sized domestic ones looking to step up presence in the biggest market.


    Further, consolidation of distribution channels in the US could reduce the pricing power of domestic drug makers, it said.


    "Sharper focus on innovation and R&D has become imperative. Our analysis of new drug applications (NDAs) approved by the USFDA reveals that Indian companies got approvals for just 26 products between January 2006 and June 2015 a fraction of the 840 garnered by global pharmaceutical companies. Their global generic competitors such as Teva and Mylan had 48 and 33 NDAs to their credit as of February 2016," Crisil Research Director Ajay Srinivasan said.


    Indian companies have indeed increased their R&D spend for the top 30, it has shot up to 6.5 per cent of revenue in fiscal 2015 from 3.8 per cent a decade back.


    However, this pales in comparison with global majors, who spend close to 16 per cent. Typically, a chunk of the expenditure of domestic pharmaceutical companies is for launching generic therapies, changing product mix in generics, and process development.


    Some top pharma firms have launched R&D programmes aimed at new drug discovery.


    Crisil Research's analysis indicates that 14 companies together have 39 products in various stages of clinical development. These companies have adopted various approaches, such as in-house development, joint development and out-licensing, to manage the risk-return trade off. However, none has launched a new molecule in a regulated market such as the US.

    Abbreviated New Drug ApplicationAjay SrinivasanANDACrisil Researchexports growth in formulationsExports of genericsMylan pharmaNDANew Drug ApplicationTevaUS Food & Drug AdministrationUSFDA
    Source : PTI

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    savita thakur thakur
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