India’s Pharma Sales Growth Slows In November

Indian pharmaceutical market’s growth slowed in November as volumes dropped.

The year-on-year growth in pharma sales stood at 1.3% last month, the lowest since August 2020, Nomura reported citing data released by AIOCD-AWACS—a pharmaceutical market research organisation. That comes after 4.7% and 9.8% growth over the year-earlier in September and October, respectively.

Volumes declined 6.9% year-on-year in November compared with 0.9% growth in October, the report said. Price and new product growth stood at 4.7% and 3.2%, respectively.

While the average price and new product growth over the past eight months in the ongoing fiscal stood at 4.6% and 2.4% year-on-year, volumes declined 7.6% during the period.

Therapy-Wise Trend

Acute therapies—for severe but short-duration illness—such as anti-infectives, pain and gastro-intestinal continue to face pressures.

Over the past eight months, pain therapy has contracted by 7.6% on average. Sales of anti-infectives, ex-Covid-19 related drugs such as Favipiravir and Remdesivir, too, fell 10% over the year earlier, Nomura’s report said.

Cardiac therapies, however, have sustained during the pandemic, with 12.1% year-on-year average growth over the past eight months.

The chronic segment, according to AIOCD-AWACS, has about 31% market share, while the acute segment accounts for close to 47% of the Indian pharma market.

Company-Wise Trend

Glenmark Pharmaceuticals Ltd. witnessed the highest growth among peers in November on the back of Favipiravir, used for treating mild to moderate Covid-19, according to Nomura’s report.

That was followed by Cipla Ltd., Cadila Healthcare Ltd. and IPCA Laboratories Ltd.

Cipla and Cadila’s growth, too, can be attributed to Covid-19 drugs—Remdesivir and Tocilizumab. While these products continue to drive growth for these companies, the pace has slowed as demand has now receded with a decline in the number of infections and faster recovery, the report said.

The Way Ahead

According to Prabhudas Lilladher, India’s pharma market will witness 5-8% growth in the second half of the financial year ending March 2021 and 10-12% in FY22. That, it said, only if the second wave of the coronavirus pandemic restricts to a limited number of cases. Emkay Global also expects growth to pick up as demand normalises.

Nomura, however, sees some risk to the normalisation of growth in the second half of this year and in FY22. But while top-line growth for the Indian formulation business may disappoint, profitability will remain high due to lower costs, particularly for travel, sales, and marketing expenses, the brokerage said in the report.