MNC drug majors outshine Indian peers, draw investors' attention

Multinational pharmaceutical (MNC pharma) companies topped the list of pharma gainers in 2018, leaving larger Indian generic players far behind. Of the top 10 pharmaceutical gainers, six are multinationals. The reason for MNC pharma companies returning on the investors’ radar is the steady sales growth in India as compared to pricing pressures Indian companies face in US market. In addition, the regulatory problems related to good manufacturing practices have constrained the ability of the companies to launch new products in the US market. Further, delays in the launch of limited competition products have squeezed the opportunity available for the companies. 

To stand out, Indian companies are investing more in research and development to develop specialty drugs and stay ahead of the competition. While this is a prudent strategy, the pay-offs are only expected to come over the next couple of years. Even among the four non-MNC pharma companies that figure on the list only two, Glenmark and Torrent, have a larger presence in US market. While Divi’s is benefitting from higher outsourcing trend, Ipca has seen a rebound in sales after facing multiple regulatory and operational headwinds.