The domestic pharmaceutical industry bounced back to a nearly double-digit year-on-year growth in 2018 (9.4 per cent), after falling to an eight-year low (5.5 per cent) in the previous year. The industry’s size was Rs 1.29 trillion last year.
In 2017, growth of the industry was hampered primarily by the transition to the goods and services tax (GST), rolled out on July 1 of that year. Delayed product approvals and inclusion of more products under price caps were other reasons.
The industry performed better in 2018, in comparison, on a GST-impacted low base. Industry insiders said the rate of product approvals have also improved, and the impact of the ban on 328 fixed-dose combination (FDC) drugs, too, was limited to about Rs 1,040 crore or so.
According to the data released by market research firm AIOCD-AWACS, the domestic pharmaceutical market showed a year-on-year growth of 9.8 per cent for December, with the dermatology segment growing the fastest among therapy areas at 10.5 per cent.
For the full year, the market grew at 9.4 per cent to touch Rs 1.29 trillion. AIOCD-AWACS noted that anti-diabetes, cardiovascular, respiratory, and dermatology categories have closed the year with double-digit growth.
Overall volume growth stood at 4.8 per cent, while new introductions accounted for 2.4 per cent growth.
In the past four quarters, the growth rate has consistently been above 9 per cent, quarter on quarter. AIOCD-AWACS also noted that among the top companies, Abbott, Lupin, Intas, and Torrent are growing at double-digits on a MAT basis.
HDFC Securities analyst Amey Chalke felt that the domestic market would continue to clock double-digit growth in 2019.
“We expect the domestic pharmaceutical market to see a good recovery with a double-digit growth this year. The domestic market will see new product introductions consistently, which will fuel growth. Glenmark’s focus continues to be on the core therapy areas of dermatology, respiratory, cardio-diabetes, and oncology and we expect to have some interesting product launches during the year,” said Sujesh Vasudevan, president, india formulations, Middle East and Africa, Glenmark Pharmaceuticals.
As of December 2018, the top 10 (by sales value) have a 42.94 per cent share of the domestic pharmaceutical market, and have clocked a 10 per cent growth.
In terms of market share, it is only slightly better than 2017, when the top 10 companies held 42.7 per cent share and had clocked a 5.9 per cent growth rate.
Chronic segments have fared better — for the full year of 2018, cardiac therapy has clocked an 11.7 per cent growth, while the anti-diabetic segment has clocked 12.9 per cent growth. Abbott’s human insulin Mixtard is the largest brand in the domestic market. Four out of the top five brands are in the anti-diabetes category.
“Patient demand remains strong and chronic therapies continue to be growth drivers. Despite suppressed prices and fewer new product launches the industry has posted a decent growth. We can hope for a double-digit growth in 2019,” said A Vaidheesh, president of the Organisation of Pharmaceutical Producers of India.