Multinational drug majors Novo Nordisk and Sanofi, leaders in India's insulin pens market, have both seen double-digit revenue growth in this segment over a year, helped by price increases.
This happened despite volume growth having slowed. Data from market research entity AIOCD AWACS showed this growth in the segment (moving annual turnover or MAT unit sales growth in August) was only 0.2 per cent. Around 6.98 million insulin pens were sold; it was 6.97 mn in the year-before period (when volumes grew 4.8 per cent annually).
However, while volume growth was flat, value growth was 9.6 per cent for the segment. And, Sanofi India had value growth of 15.5 per cent in a year (MAT August 2019 over 2018), while its volumes grew 8.4 per cent. Novo Nordisk saw its volumes slip by 1.6 per cent but value growth was 7.3 per cent.
Pharmaceuticals analyst Ranjit Kapadia says for imported insulin products, the price is determined after adding a prescribed profit margin to the cost of production (which is based on landed price). "Sanofi imports its insulin, while Novo Nordisk imports insulin crystals to India and then manufactures the finished product at the Torrent Pharma facility in Gujarat," he added.
He said introduction of new-generation insulin products also helped the multinationals (MNCs) in value growth. "Sanofi launched its long-acting insulin product, Toujeo, in India last year. It already had a mature product, Lantus, in the market."
An e-mail to Sanofi did not elicit a response.
The insulin pen market (roughly Rs 400 crore a year) has seen a 15.5 per cent compound annual growth rate (CAGR) in terms of value over five years. In contrast, unit sales growth CAGR is 8.6 per cent. The overall insulin injectables market (Rs 2,863 crore) has seen a lower rate of growth, of 11.6 per cent CAGR, while oral anti-diabetic medicines (Rs 10,200 crore) did reasonably well among the overall diabetes segment, with a 16 per cent CAGR.
Another analyst said: "The insulin pen market is typically not very price-sensitive. Once a patient is on a device, he or she usually does not change the brand easily, and as this is a prescription market, doctors decide which brand to put one on to."
The MNCs have been marketing their insulin brands for decades and have entrenched brands here. "They not only have a vast network of doctors that helps them to target a patient who first starts insulin injectables but have also built popular brands here," he explained.
With the value growth in this market, Novo Nordisk (a Danish major) expanded a partnership facility with Torrent Pharmaceuticals in Gujarat last year. The 26 million vials a year Indrad facility, opened in 2009, has been expanded by 30-35 per cent. The partnership goes back 25 years, to the launch of 40 IU vial insulin in 1992. Novo Nordisk has 65 per cent of the insulin pen market.
Local players offer insulin at a 25-30 per cent lesser price. Major ones Wockhardt and Biocon have both seen a decline in volumes in the past year, selling 69,700 and 4,000 insulin pens, respectively, in the 12 months up to August. AIOCD says Wockhardt saw a decline in value of 35 per cent; Biocon of 16 per cent.
Both the companies also have a negative value CAGR for a five-year period, of 17 per cent with Wockhardt and 37.5 per cent for Biocon.
Insulin is subject to price control and for local players, says Kapadia, it is determined in line with the wholesale price index.
Shrikant Akolkar, analyst with Ashika Institutional Research, says Biocon is focused more on biosimilars and the developed markets. "Its business in India is quite small," he said.