Minimal impact of Covid-19 on Indian pharma industry: ICRA


New Delhi, Aug 7 | The domestic pharma industry is expected to grow at a 4-6 per cent in FY-2021 owing to Covid impact, though FY 2020-2023, CAGR is expected to be in the range of 8-11 per cent on the back of healthy demand from the domestic market given increasing spend on healthcare along with improving access, rating agency ICRA has said.

In its analysis of the pharma industry in India, the rating agency said that along with demand growth in India, moderation in pricing pressure for US market, new launches and market share gains for existing products and consolidation benefits will drive growth for the industry over the medium term.

Several Indian pharma companies (Aurobindo, Dr. Reddy, Glenmark) have acquired US ANDA (abbreviated new drug application) portfolios which will aid growth going forward. The growth in FY-2021 is expected to be supported by 1.88 per cent WPI linked price hike for domestic NLEM (National List of Essential Medicines) portfolio.

The prospect for current year comes on the backdrop of the Indian pharmaceutical industry’s stable growth of eight per cent during FY-2020 led by rebound in domestic growth in Q2 FY-2020 to 14.2 per cent (Q1 FY-20 at 4.8 per cent) supported by seasonal factors and stable growth in chronic therapies.

Based on the trends, ICRA Vice President and Co-Head Gaurav Jain said, “The global demand scenario is largely expected to remain stable for Indian pharmaceutical industry owing to inelastic nature of prescription drugs though some impact on volume growth will be felt owing to lockdown (lesser OPDs/elective surgeries) and lower economic growth. The impact of lower demand will be felt more in less developed countries which are additionally negatively impacted owing to low crude oil prices.”

As per ICRA research, post onset of Covid-19, manufacturing activity has gradually started in China with shipments/air cargo arriving in India for APIs, Intermediates and KSMs (Key Starting Materials). This has led to production continuation for Indian players though the capacity utilization across plants is yet to reach pre-Covid-19 levels.

The lower capacity utilization is largely contributed by restricted movement of personnel and availability of non-critical raw material (e.g. packaging material) during the lockdown period in India. Indian players hold 2-4 months of inventory (raw material & finished goods) and similar levels in distribution channel (finished goods) which will largely suffice demand in the near term till situation normalizes.

The outbreak of the Coronavirus in China and the consequent lockout in parts of China had earlier resulted in a shutdown of production units in China. The domestic pharmaceutical industry is highly dependent on imports, with more than 60 per cent of its active pharmaceutical ingredients (API) requirement being imported, and in some, specific APIs like cephalosporins, azithromycin and penicillin, the dependence is as high as 80-90 per cent. Of the total imports of APIs and intermediates into India, China accounts for 65-70 per cent.

The recent introduction of Rs 10,000 crore bulk drugs park and production linked incentives for API manufacturers by the Government of India will lead to reduced dependence for the domestic formulators on imports from China and augurs well in the long run to manage supply disruptions, the agency said.

The incentive scheme covers 53 APIs which are critical from import dependence on China with few API/KSM being entirely imported.

As for the growth and profitability, the same would however be constrained by regulatory interventions such as price controls, compulsory genericisation for domestic market. For the US market, faster generic approvals and continued regulatory overhang with respect to manufacturing quality deficiencies highlighted during USFDA audits remains key concern.

The pace of ANDA approvals has more than doubled over the FY 2014-2019 period leading to higher competitive intensity. The pace of official action post USFDA audit has also increased during the FY-2019 period with 16 warning letters compared to seven in FY-2018.

The margins have remained flattish in FY-2020 at 20.3 per cent for ICRA sample of 14 leading companies led by cost cutting measures including R&D optimisation efforts by Indian Players. Though margins remain healthy, pricing pressures for the US base generics business (albeit moderating); lack of limited competition products and manufacturing quality issues will continue to put margin pressure. Higher share of domestic business and operational efficiencies will provide overall cushion to margins.

Unlike in the past, when several Indian pharma companies ramped up their R&D spend, targeting pipeline of specialty drugs, niche molecules and complex therapies, this time around companies are optimising their R&D spend owing to above mentioned factors. Also, with competitive pressures expected to sustain in the near to medium term, companies are exiting product development of easy to manufacture, simple generics with multiple players and focusing on complex generics and specialty products.

According to ICRA, Indian companies are unlikely to significantly modify current spend on R&D development which will support their long-term growth prospects. With R&D optimization efforts underway to counter US pricing pressure, the aggregate R&D spend is expected to be maintain at current levels of 6.5-7.5 per cent compared to earlier 8-9 per cent for sample companies. This will be despite requirements arising from expanding presence in complex therapy segment such as injectables, inhalers, dermatology, controlled-release substances and even biosimilars.

Source: IANS

Sponsors Posts

From being a developer to a CEO in California, Manthan Dudeja's top tips to make money while you're still in college

From being a developer to a CEO in California, Manthan Dudeja's top tips to make money while you're still in college

Gone are the days when one had to finish school, college and subsequent years in getting trained to be able to sustain oneself with decent income. Today, what you earn eventually depends upon your skillset and how early you got started to build an expertise in your domain.

Manthan Dudeja, who currently lives in California and is still in his graduation years, understood the perks of starting early and is now a CEO who has worked across a plethora of jobs, from IoS programming to website development and blogging to trying his hand at Amazon Associates.

In conversation with this dynamic entrepreneur, let’s decode the various options for freshers to make a side income while they are still in school/college –

  • Content writer/Editor

Manthan explains how he started off by writing for blogs with whatever knowledge he had and with the help of internet, this could be by either writing for your own online blog, for instance Manthan was interested in Tech, so he was writing for his blog ‘TechCrack‘ or for someone else in the capacity of a content writer.

It’s not difficult to get started if you have the basic understanding to develop a ‘flow’ while writing a piece and the skill to write what suits your target audience.

  • Software developers/ Programmers/ Coders – Today, software/app developers are earning more than the average of $60 an hour by working remotely. There are a host of online paid/free platforms providing trainings to acquire such skills, Manthan has been an app/website developer for the longest time and by far, this skill has given him the best results for his work.
  • Digital Marketer/ E-Marketer-

Your journey to become a digital marketer starts the day you take the step of self-educating yourself and learning the tricks to attract potential customers either by way of Google, Facebook, or any other digital platform by a host of scalable ways on the internet, undoubtedly, digital marketing is the hottest online work from home concept of this decade.

Manthan is today a successful digital marketer who has equipped himself with the advanced knowledge of online ads on various mediums and has effectively used these skills to generate incredible revenue over time.

These are some of the best ways to get started, according to Manthan, all


Sponsors Posts

2 BHK Residential Apartment for Sale in Aadhya Hills Bhita Jabalpur

2 BHK Residential Apartment for Sale in Aadhya Hills Bhita Jabalpur
Aadhya Hills is one of the residential development. It offers spacious and skillfully designed apartments. The project is well equipped with all modern amenities to facilitate the needs of the residents.
  • Property type: Residential Apartment 
  • Offer type: For Sale 
  • City: Jabalpur 
  • Zip Code: 482001 
  • Locality: Bhita 
  • Landmark: Bhita 
  • RERA Registration Number: P-JBP-18-1599 

For more details please click here or visit


Please enter your comment!
Please enter your name here