Of late Indian bulk drug exports have shifted in favour of regulated markets evidently as there has been an increase in the share of these markets to about 49 per cent in 2013-14 from about 43 per cent in 2008-09, noted the study.
Exports of bulk drugs used for manufacturing off-patent drugs will continue to grow at a 12-14 per cent CAGR in the next 5 years till 2018-19 while demand for API from on-patent drugs is expected to grow at a slower pace, the study highlighted.
This is mainly on account of the expected slowdown in the branded medicines market in both Europe and America. This coupled with pricing pressures is expected to impact pricing realisations for Indian API exporters. However, strong growth in volumes is still expected in these markets as increasing competition from generics will lead to cost pressures on innovator companies, it added.
“Growing at a CAGR of 12-14 per cent between 2013-14 and 2018-19, domestic formulations market is likely to cross $20 billion (bn) mark by 2018-19 from a level of about $11 bn in 2013-14,” further noted the ASSOCHAM-Yes Bank joint study.
“The growth story of domestic formulations market is expected to remain strong, led by a rise in life-related diseases, better healthcare diagnostic infrastructure adding to increasing disease detection rate, new product introductions, volume growth driven by increasing penetration and better access to healthcare.”
Further, India’s formulation exports are expected to grow at a CAGR of 14-16% between 2013-14 and 2018-19.
During the 2012-2017, drugs generating annual sales of about $130 bn are likely to lose patent protection and will be exposed to generic competition, highlighted the study.
“Therefore sales of generics are expected to grow at a CAGR of 7-9 per cent over next five years thereby outperforming the overall global pharmaceutical market, whose growth is expected to be limited to 3-5 per cent.”
Indian players are currently well placed to widen their presence in the generics market, noted the ASSOCHAM-Yes Bank study. “This is reflected in rising number of Indian players seeking Abbreviated New Drug Application (ANDA) approvals and tentative approvals from the US FDA (Food and Drug Administration).”
Additionally, mid-sized and small-sized Indian formulation manufacturers, who traditionally resorted to contract manufacturing, are also looking to tap the generic opportunity in regulated markets, further noted the study.