Pharmaceutical companies in India are experiencing a period of double-digit revenue growth, despite ongoing challenges in their largest export market, North America. The September quarter saw companies reporting an average revenue growth of 14-15%, thanks to a stabilization in the US generics market.
However, concerns remain about the potential return of pricing pressures that have plagued the Indian pharma sector. According to analysts, while US price erosion has stabilized due to drug shortages, it is still expected to remain in the high single digits.
The issue of price erosion varies for different types of generics, with simple generics experiencing the most significant fall. This is particularly bad news for big pharmaceutical companies like Cipla, Zydus Life, and Dr. Reddy’s, which mainly focus on simple generics.
The USFDA inspections and the potential for increased price erosion once supplies normalize continue to be major concerns for the industry. Analysts suggest that companies should focus on launching niche products in the US market to stay competitive and overcome these challenges.
In addition to addressing pricing challenges, pharmaceutical companies also need to build a robust pipeline of approvals to launch new products. While some companies like Dr. Reddy’s have had success with new approvals, others are struggling to generate sustained growth due to a lack of meaningful new approvals.
Experts emphasize the importance of expanding product portfolios and securing approvals for new generics to maintain growth in the challenging pricing market in the US. Overall, while the sector has experienced growth, there are still concerns about the potential return of pricing pressures and the need to innovate and diversify product offerings.
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