Higher spending, urbanisation to boost domestic pharma markets: Fitch
Increase in consumer spending in India would provide a boost to domestic pharmaceutical companies over the medium term, credit rating agency Fitch said.
The growth in pharma market was also attributed to urbanisation, improving access to medical facilities and health insurance, and the growing prevalence of lifestyle diseases, Fitch analysts, Snehdeep Bohra and Akash Gupta said in a report dated November 14.
“Government’s focus on regulating prices over the past few years has led to moderate growth. The pricing environment is likely to remain tough, though we expect government to take a more collaborative policy approach – to encourage investment,” the report said.
Sun, Dr Reddy’s, Lupin and Cipla selective acquisitions to augment their existing drug portfolios and solidify their presence in both existing and new geographies will limit deleveraging over the short term, the report said.
However, pharama companies may lose profitability and face price erosions due to newer entrants in western medicine.
“The US generics market has experienced a significant increase in new entrants over the last decade, leading to sustained downward pressure on prices of generic drugs. Moreover, the consolidation of large pharmacies has provided them with increased bargaining power, affecting both the prices and trade terms of generic drugs,” the analysts said.
Speciality and complex generic drug segments may become a key growth area as Indian pharma competitors focus on pure generics.
“Rising competition in the pure generics segment has led many of the top Indian pharma companies to focus increasingly on speciality and complex generics through higher R&D spending,” the report said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.