Domestic Growth Helped Pharma Companies to Offset Pricing Pressure in the US

Rising revenues in the domestic market helped Indian pharmaceutical companies counterbalance the ongoing pricing pressure on generic drugs in the US in the financial year ended 31 March 2019 (FY19), says Fitch Ratings. The US and India are the two key markets served by Indian pharmaceutical companies, which sell predominantly generic drugs. Many of the leading pharmaceutical companies - including Glenmark Pharmaceuticals Ltd, Lupin Ltd and Dr Reddy's Laboratories Ltd (DRL) - reported double-digit growth in their domestic sales, supported by robust growth in chronic categories such as cardiac, anti-diabetics and respiratory, which in turn supported overall industry growth of 11% during FY19. By contrast, Fitch says, growth in the US market remained subdued for many Indian drug-makers, as consolidation of pharma distributors and a faster pace of approvals of new generic drugs by the US Food and Drug Administration (USFDA) has resulted in continued pressure on generic drug pricing over the last few years.  "Companies with a solid record of compliance with the current good manufacturing practices (CGMP) of the USFDA - such as Glenmark - have experienced less severe revenue pressure as they managed to avoid regulatory disruption to existing business, and launched new products leveraging on timely approvals from their abbreviated new drug application (ANDA) pipeline. Similarly, the ramp-up of speciality portfolio and generic launches with 'first-to-file' exclusivity helped some of the larger companies boost their US revenues in fourth quarter (4Q) of FY19," the ratings agency added.