Managing Director & CEO
It gives me pleasure to address you once again by sharing my thoughts about yourCompany its working the Industry Scenario and the road ahead.
As you are all aware due to the raging Covid-19 pandemic it has been a verytumultuous year and all of us were affected by the disruptions that were brought along byit.
Like all pharma companies battling the same your Company was no exception. Afterfacing some difficulties initially your Company was able to stabilize its operations.
It is heartening to note that despite the COVID-19 impact the domestic pharma industryhas grown between 4-6 per cent in FY-21 and is expected to have an 8-11 per centcompounded annual growth rate (CAGR) in the FY 2020-2023 period mainly led by growth inthe domestic market as predicted by an ICRA research analysis.
The global demand scenario is largely expected to remain stable for Indianpharmaceutical industry owing to inelastic nature of prescription drugs though someimpact on volume growth will be felt owing to lockdown and lower economic growth. Theimpact of lower demand will be felt more in less developed countries.
The Government has been very supportive towards the pharma Industry and the followingare some of the initiatives taken by it:
Some of the initiatives taken by the Government to promote the pharmaceutical sector inIndia are as follows:
In September 2020 the government announced production linked incentive (PLI)scheme for the pharmaceutical industry worth Rs. 15000 Crore (US$ 2.04 billion).
India plans to set up a nearly Rs. 1 lakh Crore (US$
1.3 billion) fund to provide boost to companies to manufacture pharmaceuticalingredients domestically by 2023.
Under Budget 2020-21 Rs. 65012 Crore (US$ 9.30 billion) has been allocated tothe Ministry of Health and Family Welfare. The Government has allocated Rs. 34115 Crore(US$ 4.88 billion) towards the National Health Mission under which rural and urban peoplewill get benefited.
Rs. 6400 Crore (US$ 915.72 million) has been allocated to health insurancescheme Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB- PMJAY).
Government of India has offered Rs. 6940 Crore (US$ 942.8 million) productionlinked incentives between 5-20% for incremental sales and plans to set up three mega drugparks to drive sustainable cost competitiveness.
Medicine spending in India is projected to grow 9 12% over the next five years leadingIndia to become one of the top 10 countries in terms of medicine spending.
Going forward better growth in domestic sales would also depend on the ability ofcompanies to align their product portfolio towards chronic therapies for diseases such assuch as cardiovascular anti-diabetes anti-depressants and anti-cancers which are on therise.
The Indian Government has taken many steps to reduce costs and bring down healthcareexpenses. Speedy introduction of generic drugs into the market has remained in focus andis expected to benefit the Indian pharmaceutical companies. In addition the thrust onrural health programmes lifesaving drugs and preventive vaccines also augurs well for thepharmaceutical companies.
The opportunities ahead as reported by EY-FICCI seem to be promising:
Key Highlights of the EY-FICCI report titled: 'Indian Pharmaceutical Industry 2021:future is now
The opportunities that have emerged to accelerate the growth of Indian pharmaceuticaland healthcare industry are - innovation led research and development
healthcare delivery (R&D) manufacturing and supply chain and market access.
1. Accelerating research and innovation:
There is a need to move up India's share of trade in value
To meet this objective the industry must consider setting up an overarchingregulatory body and a central body to streamline research infrastructure and financingfrom all government bodies to explore new models for financing R&D to increaseprivate investments and also make available funds for high risk and longterm projectsimprove industry-academia collaboration and establish a strong innovation ecosystem.
2. Achieving equitable and sustainable healthcare:
The increased acceptability of digital technologies has the potential to improvehealthcare delivery. This explores the progress towards achievement of universalhealthcare access establishing efficient processes like the use of Aadhar card toidentify and simplify the delivery based on healthcare coverage category.
Enabling teleconsulting and focusing on preventive healthcare are some otherareas for consideration with the role of the industry government healthcare sector andinsurers carved out.
3. Strengthening manufacturing and supply base in domestic and global markets:
The focus of manufacturing and supply chain initiatives would be to developcapabilities in APIs and enable the manufacturing of complex generics. Ease of doingbusiness is a critical enabler to set up world class manufacturing facilities.
The attractiveness of the manufacturing sector too needs to be enhanced in orderto attract the best talent in India and abroad.
Given the growth ambitions it is vital to encourage and setup pharma machinemanufacturing facilities in India to lower fixed costs enable savings in forex and reducetime to set up additional facilities.
There is also a need to bolster the logistics infrastructure for connecting thekey pharma hubs in the country in order to facilitate quick and cost efficient movement ofgoods including cold chain facilities
4. Improving access to medicines:
The market access to prescription drugs needs to improve in the country
Various global best practices in drug pricing and procurement models can becontextualized for developing geographies Digital marketing of pharma products too must beconsidered
Performance of your company:
Coming to the performance of your Company your Company has reported a betterperformance for the year 2020-21 as compared to 2019-20.
Performance 12 months 2020-21 Vs 2019-20
Net Profit increased by Rs. 10.50 Cr. (66 %) (Rs. 26.30 Cr. Vs Rs. 15.8 Cr.)
Profit before tax increased by Rs. 14 Cr. (78 %) (32 Cr. Vs Rs. 18 Cr.
Total Income increased by Rs. 29 Cr. (Rs. 234 Cr. Vs Rs. 205 Cr.)
This has been possible because of your continued support and cooperation which I hopewill continue in the years to come.
I would like to sign off by placing on record my gratitude towards our shareholderscreditors Banks Government and employees for their unstinted cooperation and support.
Dr. Sachin D. Patel
Managing Director & CEO