US, UK in focus as pharma companies eye $31 billion exports in FY25

Industry also working to pump up business in Africa and Russia, regions battling geopolitical crises

As India seeks $31 billion in pharmaceutical exports in financial year 2024-25 (FY25), the United Kingdom (UK) and the United States (US) are its top targets.

India exported pharmaceutical products worth $27.9 billion in FY24, growing 9.6 per cent from the year before.

Udaya Bhaskar, director general of the Pharmaceutical Exports Promotion Council (Pharmexcil), said the group targets $1 billion in exports to the UK where demand for affordable generics is rising. “We were in the UK last month for meetings. We are also planning a road show in Belgium, the Netherlands, and the UK in November or so,” he told Business Standard. The UK’s publicly funded National Health Service (NHS) is unable to honour prescriptions immediately due to drug shortages and aims to reduce health care costs -- a step that would lead to higher demand for affordable generics, said Bhaskar.

Destination UK and US

The UK is a promising export destination in FY25, according to Pharmexcil. India’s drug exports to the UK increased by 21.1 per cent year-on-year (Y-o-Y) in FY24 to $784.32 million after falling by 8.28 per cent the previous year. The UK accounts for 2.82 per cent of India’s pharmaceutical exports.

The US comprises 31 per cent of Indian drug exports and that market is growing too. Indian exports to the US grew 15.6 per cent Y-o-Y in FY24, riding on drug shortages (Teva Pharmaceuticals, a generic drugmaker, stopped production at some of its sites in the US).

Bhaskar said the US will continue to be a “driving force”’ for Indian drugmakers as more than 90 per cent of the prescriptions there are for affordable generics. As many as four out of 10 prescriptions filled in the US in 2022 were supplied by Indian companies.

Americans filled 6.7 billion prescriptions in 2022, marking a 3.6 per cent increase from 2021, according to a report by IQVIA called ‘US-India Medicine Partnership: India’s Contribution to the US Healthcare System’.

Between 2018 and 2022, prescription volume in the US had an average annual rise of 2.5 per cent. Of the 6.7 billion prescriptions dispensed, 80 per cent were for chronic therapies. Over the last five years, prescriptions for chronic conditions such as diabetes, anxiety and depression, and cancer have seen an average annual growth rate of 3.4 per cent.

Medicines made by Indian companies provided $219 billion in savings to the US healthcare system in 2022 and $1.3 trillion between 2013 and 2022. Generics from Indian companies are expected to generate an additional $1.3 trillion in savings over the next five years.

Wider world

Indian pharmaceutical companies are also looking at Africa, Nigeria particularly, and the Commonwealth of Independent States (CIS) comprising Russia and some other states of the former Soviet Union—all regions where their business is under pressure.

Africa comprises around 14.19 per cent of India’s pharmaceutical exports. In FY24, exports to the continent grew by 8.18 per cent (a major turnaround from a 5.4 per cent decline in FY23) to $3.9 billion. Pharmexcil sent delegations to Nigeria, Benin, Ethiopia, and Tanzania in November 2023. This December, there is a plan to send a delegation to South Africa, Zambia, and Mozambique.

South Africa accounts for 2.58 per cent of India’s drug exports, almost in line with the UK’s share. Bhaskar said exports to South Africa, a highly regulated country, grew by 7.23 per cent in FY23 and by 9.37 per cent in FY24.

The problem is in Nigeria, where India’s pharma exports declined by 12.3 per cent in FY23 and by 1.5 per cent in FY24. Bhaskar said that several reasons are at play in Nigeria – from focus on local production to cough-syrup deaths in Gambia crisis creating a bad image about Indian drugs and regulatory issues.

CIS is another area troubled due to geopolitical issues. Russia accounts for nearly 50 per cent of India’s exports to the CIS bloc and its war with Ukraine is worrying, said Bhaskar.

Exports to CIS countries declined by 3.85 per cent in FY24 and the contraction is likely to continue until the Ukraine crisis ends. Pharmexcil estimates that the generics market in Russia is expected to suffer a “degrowth” in FY25.

Russia has seen a 9.5 per cent decline in Indian pharmaceutical exports to $518 million in FY24 after a 4.19 per cent fall in FY23 ($573.2 million).

Pharmexcil is sending delegations to some CIS countries after its delegation visited Russia, Azerbaijan and Georgia in March 2023. “We are hosting a delegation to Uzbekistan, Kazakhstan, and Tajikistan in July 2024,” Bhaskar said, adding that he would be speaking at the St. Petersburg International Economic Forum (SPIEF) in June. SPIEF is convened by the Roscongress Foundation and Russia’s president attends it.