September 30, 2020: Exports are helping pharmaceutical (pharma) companies sustain the growth momentum as they launch new products and tap newer markets. While sales in the domestic market declined 4.2 per cent during the April-July period, exports grew steadily at 9.5 per cent during the same period.
“Exports to South Africa and the UK (which are the No. 2 and No. 3 markets for Indian pharma) have recovered after a decline in 2019-20. Exports to the US are growing steadily. Indian companies are also tapping new opportunities in Latin America. Earlier in the month, we signed an agreement with the state of Hidalgo in Mexico to promote exports and investment in that country. Mexico is still a small market for us, but was the fastest growing export destination in the April-July period.
Currently, the country largely depends on the US and Europe for its medicines. Indian companies are looking to grow their share by supplying antibiotics, antivirals, and chronic therapy drugs,” said Ravi Uday Bhaskar, director general of Pharmaceuticals Export Promotion Council of India (Pharmexcil).
During April-July, drugmakers exported products worth $7.4 billion — a growth of 9.5 per cent year-on-year (YoY). While the export of formulations and biologicals rose 16.7 per cent, the export of bulk drugs and intermediates fell 7.2 per cent. Vaccine exports, too, were lower by 19 per cent YoY as immunisation programmes took a back seat due to the Covid-19 pandemic.
“Our key markets — the US and South Africa — are driving growth for us. We have had meaningful launches like the first generic version of Albuterol (bronchodilator) in April and have a strong product pipeline in the US, especially in the respiratory segment. With fewer elective surgeries, we have been able to grow fast in both the markets because of new products and commercial excellence,” said Kedar Upadhye, global chief financial officer, Cipla.
Drugmaker Lupin expects its exports to stabilise to pre-Covid levels in the next two quarters, with the launch of new products in Europe and the US. These include biosimilar Etanercept in Europe and Albuterol in the US.
The company has also reintroduced key anti-diabetic drugs like Glumetza and Fortamet in the US, following a voluntary recall earlier this year.
Rating agency CRISIL expects Indian pharma exports to grow at 11-12 per cent in the current financial year and outpace the domestic market, which is estimated to grow 5-6 per cent. This would result in 8-9 per cent overall growth for the industry.
According to CRISIL, growth in exports to regulated markets like the US and Europe will be supported by a steady increase in new product launches from compliant plants, lower pricing pressure on existing generics, and a visible easing in scrutiny by the US Food and Drug Administration in recent months.
Tanvi Shah, associate director, CRISIL Ratings, said, “Higher exports should offset some of the reduction in domestic formulation sales because of pandemic-led disruptions, especially in the acute therapies segment (around 60 per cent of domestic formulation sales).”
Source: Business Standard
