In the last two months of 2012, annual growth in the sales revenue of the pharmaceutical sector plunged to a two-year low of four to five per cent. While industry experts couldn’t specify a reason for the sudden decline, data showed it was primarily triggered by stagnant growth in key segments such as anti-infectives and respiratory drugs. Growth in important therapeutic segments such as diabetes and cardiac drugs also recorded a fall.
According to data from the All India Organisation of Chemists and Druggists (AIOCD), in terms of sales revenue, Cipla rose to the second slot in December, replacing Sun Pharma. In November, Cipla was third on the list. Ranbaxy (fourth on the list in November, after Abbott, Sun Pharma and Cipla), fell to the sixth slot in December. Glaxo and Zydus were fourth and fifth, respectively.
Among the top 25 companies, Sun Pharma recorded the highest annual growth (17.3 per cent) in December.
Data shows the Indian pharmaceutical industry grew 5.1 per cent in December, compared with 15 per cent in December 2011. The anti-infective segment, which accounts for 17 per cent of the Rs 69,338-crore pharmaceuticals market, remained flat. In November, the industry’s growth had fallen to 4.1 per cent. While the industry attributes the slowdown in November to the Diwali festival, it is worried about the low growth in December.
| DRUGGED The sector has seen an year-on-year dip in sales revenue growth |
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| Losers: Sun Pharma and Ranbaxy Gainers: Cipla and Lupin 17.3% Sun’s growth, the highest among top 25 companies Source: AIOCD |
“Year 2012 started with a bang (January-March registered 18.7 per cent growth) and ended with a whimper (growth in October-December was 9.1 per cent). The trend in the first, second, third and fourth quarters — 18.7 per cent, 16.9 per cent, 13.5 per cent and 9.1 per cent, respectively — definitely points to a slowdown, though it doesn’t seem as drastic as the last quarter suggests,” AIOCD said in a note.
However, some are optimistic the trend could be temporary. Alok Saxena, joint managing director, Elder Pharma, said, “It is difficult to point at a reason for such a slowdown. We are trying to analyse it. Certainly, it wouldn’t be a permanent trend. I am optimistic growth would bounce back to previous trends as early as January.”
Though the slowdown follows the announcement of the new pharmaceutical pricing policy, industry experts don’t cite this as a reason for the fall in growth. “I do not think it is the reason,” says Saxena. A pharmaceutical sector analyst agrees. “This is not because of the pharma policy. If at all the policy has an impact on pricing, it would be long-term,” he said.
Lupin Group President Shakti Chakraborty says, “The current slowdown in the Indian pharmaceutical market is largely due to the economic volatility one saw through the last 18 month and its impact; the slowdown in GDP (gross domestic product) and growth therein and the fall in disposable incomes directly impacted consumption and growth in the domestic pharmaceutical market.”