Pharma industry to grow by 10-12% in FY14: ICRA

The Indian pharmaceutical industry is expected to grow by 10-12 per cent during 2013-14, says a recent study by ICRA. The main driver for growth will come from generic opportunities in the US.

The study claims that despite the high-base of the previous year, the pharma industry would continue to experience strong growth in the near-term. However, it also cautioned that there would be some moderation in the growth trajectory. Generic opportunities in US will continue to drive revenue growth for Indian pharma companies.

Drugs worth $80 billion are expected to go off patent over the next four to five years. Indian companies have lined up strong product pipelines of pending abbreviated new drug applications (ANDAs). However, they still have a relatively small base in the US generics space, leading Indian companies have a share of less than 10 per cent market share. ICRA further feels that, "acquisitions by Indian companies to add technical capabilities and focus on strengthening branded business (albeit on a small scale) are also likely to drive growth going forward as companies feel the need to diversify, the study states."

The impact of new drug price control order (DPCO) though expected to be limited, could also get offset by volume expansion and efforts of industry participants to take price hike in rest of the portfolio, the study adds.

In Europe, the performance of Indian companies improved in 2012-13 in comparison to the prior year led by primarily new product launches which helped to offset the impact of pricing pressure. In general, Indian pharma companies generate a relatively lower share of revenues from Europe with profitability also subdued compared to other markets, the study point outs.In addition US generics, emerging markets present one of the most promising growth opportunities for Indian pharmaceutical companies. As growth prospects normalise in developed markets, companies are increasingly focusing on emerging markets through portfolio expansion, alliances or joint ventures and acquisitions, said ICRA.