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Despite pricing pressure, pharma exports to US may rise in FY18: Report

Indian Pharma Industry earns around 70% of its revenues from sale of generic drugs

Press Trust of India  |  Hyderabad 

Despite pricing pressure, pharma exports to US may rise in FY18: Report

Despite pricing pressure and stiff competition, the to the may go up in 2017-18 as $50 billion worth of drugs are expected to become off-patented during the current year giving hope to boost the export market, said a report by

"The Indian pharmaceutical industry is likely to face competition from other countries to get ANDA (Abbreviated New Drug Application) approval. Apart from this, the Indian pharma will continue to witness pricing pressure in the US generics market due to consolidation of distribution channels and increase in competition.


"The pharma export volumes from India to US however are expected to rise. This will be backed by about $55 billion expected sales gain to generics drugs on account of branded drugs going off patent during 2017-19 which will create an opportunity for segment. We expect growth rate for (Contract Research and Manufacturing Services) to be higher compared to average growth rate of the industry. These factors are likely to support pharma exports from India," the Care report said.

The (IPI) earns around 70 per cent of its revenues from sale of generic drugs and generates around 50 per cent of its revenues from exports.

IPI registered revenue of around $33 billion in 2016. Exports form a major part of the industry's turnover and over 50 per cent of the sales comes from exports.

Of the total exports of $16.8 billion during the year 2016-17, majority of the exports, accounting for 40.6 per cent were to the American continent followed by 19.7 per cent to Europe, 19.1 per cent to Africa and 18.8 per cent within Asia, the report said.

"The prime reasons for the weak exports were price erosion in the generic market in the due to consolidation among customers i.e. The distribution channels, increase in competition, absence of blockbuster drugs going off patent and regulatory issues faced by Indian pharma companies," it said.

In 2015-16, exports to surged by 27.8 per cent to $5.5 billion on a year-on-year basis. However, the export scenario to weakened and it grew by a marginal 1.3 per cent to $5.6 billion in 2016-17.

In 2016-17, the industry faced a slew of issues with increased scrutiny of regulatory authorities, increase in competition in generics market of one of its primary export destination, This, in turn, resulted in marginal growth in exports to that country.

Also, stricter enforcement of Drug Price Control Order has impacted revenue growth rate of the industry in domestic market, the report said.

The report also said with implementation of GST, there will be no major change in the prices of medicines and there is an expectation that the government will continue to keep a check on the prices of controlled as well as non-controlled drugs.

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