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US exports may drive top Indian pharma cos to grow 20% in 2013

Patent expiry opportunities, coupled with efforts to contain healthcare spends, are likely to drive the generic market in developed countries

Read more on:    Nppp | Us Exports | Pharma Sector
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Top Indian pharma players will continue to grow strongly at over 20% in 2013, primarily led by exports to the US market, India Ratings said in its outlook for the sector.

"We believe that top players of the sector will continue to grow strongly in 2013 (over 20% per annum), primarily led by exports.

"Of the export markets, Indian pharma will focus on the US market which presents significant opportunities for the next two years for generics, due to patent cliffs and recent changes in healthcare policies," said the India Ratings report on outlook for Indian pharmaceuticals for 2013.

Patent expiry opportunities, coupled with efforts to contain healthcare spends, are likely to drive the generic market in developed countries. Affordability and availability will make a case for generics usage in the branded generic developing markets.

As per IMS Health, global generic spending is expected to increase to $430 billion by 2016 from $242 billion in 2011.

India Ratings said R&D spends may continue to increase in 2013 as well as Indian players have started targeting complex chemistry products.

R&D spends have increased over the last few years as pharma players have built robust portfolios of products approved by USFDA. Most companies also have a strong pipeline of products awaiting approval, it said.

Robust new product pipelines may bear fruit in 2013 on commercialisation. Incremental capex requirements, however, are likely to remain modest in the year as many companies benefit from existing infrastructure which would be sufficient for expected increase in operations, according to the agency.

Observing that the growth drivers for domestic pharma market would remain intact, India Ratings said the decision of National Pharmaceutical Pricing Policy () 2011 to increase the number of drugs under price control will not have any major impact on the sector's profitability.

A rise in demand for generics in developed markets will be led by patent expiries and an expansion of generics usage due to efforts taken to control healthcare costs by governments, according to the report.

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