Fierce competition among new drug brands for share of India market

The competitive intensity is high between brands, at a time when volume growth in the domestic pharma market is on a slow lane

Pharma companies have been introducing new products at a healthy pace in the domestic drug market, but the return on investment is a challenge across therapy areas (disease groups), shows a recent analysis by market research firm Pharmarack AWACS.

On an average, companies spent around 30-40 per cent of a brand’s targeted annual sales to promote a new brand, said Sheetal Sapale, vice president, commercial, Pharmarack AWACS. For legacy brands, this spend came down to around 10-12 per cent of the annual targeted sales of the brand.

However, Sapale pointed out that out of 54,355 brands captured in the Indian Pharma Market (IPM), only 30 per cent had a turnover of Rs 1 crore and only 7 per cent had over Rs 10 crore annual turnover in July.
 

Of the 2,777 launches in the last 24 months, only 15 per cent have managed a turnover of over Rs 1 crore, and just 1 per cent have a turnover of over Rs 5 crore.

The analysis showed that among the top 10 therapies, segments such as cardiology, anti-diabetic, and gynaecology had a relatively better percentage of brands with a turnover higher than Rs 1 crore and Rs 10 crore. Around 42 per cent cardiology brands had turnover of over Rs 1 crore, while 12 per cent had a Rs 10 crore-plus turnover. In the anti-diabetic segment, too, the ratio is similar.
 

The competitive intensity is high between brands at a time when volume growth in the domestic pharma market is in the slow lane. The volume growth has been in negative terrain for the last four months. In 2022, volume growth was negative for five months of the year. The overall growth in India’s pharma market is coming from price growth, and new introductions. The market is thus expected to remain competitive, say experts.