Pharma exports may fall

The pharmaceutical sector is heading for a tough time as exports growth in formulations (in US dollar terms) is expected to almost halve to 10-12 per cent annually over the next five years, a report said.

“Exports growth in formulations (in US dollar terms) is expected to decline sharply to 10-12 per cent annually over the next five years, compared with a growth of 19 per cent seen in the last decade,” Crisil Research said in its report here.

Exports of generics have been the growth engine of the industry for a long while now, but the script is changing because the value of drugs going off-patent is declining even as pricing pressures are increasing, it said.

The annual sales growth of generic drugs in the United States, the largest generics market, is seen slowing to eight or nine per cent over the next five years, and decelerate even more after that.

Therefore, for growth to sustain beyond 2020, domestic companies will have to step up investments in new molecules and draw up a roadmap to deal with lower generics growth, it said.

Competition has been intensifying, particularly for the large players, because of the huge number of abbreviated new drug applications (ANDAs) being filed with the US Food and Drugs Administration (USFDA), including by mid-sized domestic ones looking to step up presence in the biggest market.