Indian pharma may face muted US growth in FY27 on gRevlimid pressure

Ind-Ra says Indian drugmakers will still see 10% revenue growth in FY27 driven by domestic demand and CDMO traction, despite weaker US sales after Revlimid expiry

India’s pharmaceutical sector is projected to see a moderate growth in the United States (US) due to lack of contribution of generic versions of cancer drug Revlimid, according to India Ratings and Research (Ind-Ra).

 

This comes despite the ratings agency estimating a 10 per cent revenue growth in the financial year 2026-27 (FY27) for Indian drugmakers, driven by healthy domestic sales and increased traction in the contract development and manufacturing organisation (CDMO) business. 

 

Firms such as Dr Reddy’s, Cipla and Sun Pharma have reported a muted growth in the US market due to expiry of gRevlimid’s patent in January 2026, increased market competition and volume-restricted settlements. 

These firms had entered settlements with Revlimid's innovator Mylan, allowing them to sell the drug in limited quantities from 2022 until its patent expiry last month. While the drug had been a substantial revenue and margin driver for these companies, offloading of remaining quotas throughout the current financial year is projected to see a decline in sales.

 

Still, the US generic market remains the second-largest revenue contributor for Ind-Ra-rated pharma companies, at around 35 per cent of overall revenue.

 

“The coverage universe delivered strong growth between FY23 and FY25 (average growth of 10.7 per cent on-year) against muted 1 per cent average growth in FY18 to FY22, driven by product-specific opportunities, including specialty launches and key generics such as Revlimid and Mirabegron, drug shortages in the US market and a moderation in pricing pressure,” Ind-Ra said.

 

Analysts added that India will continue to benefit from zero import duty on pharma exports to the US under the interim trade deal, leveraging the US' reliance on Indian generics due to limited domestic capacity.

 

“While still under Section 232 investigation, any end result is unlikely to impact the credit profiles of Indian pharma companies in the US market which contributes around 35 per cent to the total revenue for leading Indian drugmakers,” Krishnanath Munde, associate director and co-head healthcare at Ind-Ra told Business Standard.

 

On the other hand, analysts expect the domestic pharma market to grow 9 per cent on-year in FY27, led by drug price hikes and product launches, despite volume growth may be subdued. 

 

“Additionally, significant contributions are expected from glucagon-like peptide-1 (GLP-1) product launches in India scheduled to start from March this year,” the agency said on Thursday.

 

Ind-Ra added that the CDMO sector offers a long-term strategic opportunity for Indian pharma, with companies investing heavily in capital expenditure to capitalise on order inflows and onshoring initiatives. 

 

“Indian CDMO players are well-positioned due to strong compliance standards, scalable manufacturing capabilities, and cost-effective operations, making them a preferred China plus one destination,” it said.