Indian drug outlook favourable: ICRA & Moody's

Ahmedabad: Outlook on the Indian pharmaceutical industry remains favourable, says ICRA & Moody report released on Wednesday. Domestic formulation market grew by 13-16% per annum in last five years.

According to the report, domestic formulation market size stood at Rs 58,300 crore, ranked third in terms of volume and tenth in terms of value, globally. The domestic growth was driven mainly by expansion in volumes and new introductions. Lifestyle-related disorders are driving growth at faster pace in chronic segments along with increasing healthcare spending.

Product patent regime was not a major constraint currently, as companies have however, not been affected as existing products continue to exhibit extended life cycle and companies continue to launch novel combinations to support growth. Lastly, limited number of products have been launched under patent protection in India. Compulsory licensing route also provides faster access to market

However, domestic companies will face challenges and competition from regulatory driven price cuts, smaller players aggression and MNCs generic majors are setting an eye on the $12-13 billion market growing at 14-15% per annum.

From 2011, trends are changing, MNCs has stepped up their focus on the Indian market as they are pursuing a comprehensive strategy. They are focusing on chronics, branded generics and launching patented products from portfolio of parent companies. Expanding their field force and focusing on Tier -II as well as Tier - IV towns. Domestic market grew at 15%, while MNC pharma revenue grew at 18.7%.

For Indian companies eyeing US generics market, seven out of the top 20 innovators products will face generic competition in 2012 with $35 billion in value. Key products losing patent protections in 2012 include - Lexapro, Geodon, Seroquel, Plavix, Tricor, Singulair and Actos. Branded drugs worth $70 billion are likely to loose patent protections between 2013-17, the report indicates.