Here's What Drove A Double-Digit Spike For Indian Pharma Market In August

The Indian pharmaceutical market grew last month, led by demand for therapies of multiple ailments at a time when infections owing to the Covid-19 pandemic fell.

Prabhudas Lilladher, citing data from All Indian Origin Chemists and Distributors Ltd., pegged growth at 17.7% year-on-year in August—compared with a 13.7% rise in July and a contraction of 2.2% in August 2020.

“Low spread of Covid-19 wave 3 will augur well for the Indian pharma market to maintain healthy growth of its core portfolio in second half of FY22," the brokerage said in a report.

Gaurav Jain, vice president at ICRA Ltd., told BloombergQuint, that muted Covid-19 impact and low base effect has resulted in April-August 2021 witnessing a double-digit growth.

He expects the momentum to sustain in September but slow in the second half of the ongoing financial year, by when it would drop to “mid-to-high single digits”. Jain attributed the trend to “normal sales” during the same period in FY21, removing the advantage of a low base effect.

The moving annual total, or the 12-month rolling sales, of pharmaceutical products in the country rose 14.5% year-on-year to Rs 1.63 lakh crore in August, Prabhudas Lilladher said in the report. Of this, prices contributed 5.5%, sales formed 4.1% and volumes 4.9%.

A robust increase in sales of non-Covid therapies and a few Covid products, too, contributed, the Prabhudas Lilladher report said.

Therapies for anti-infective (that treat infections), vitamins-minerals-nutrients, gastro intestinal, pain/analgesics and cardiac, according to the brokerage, registered maximum MAT growth.

• The top five therapy areas account for around 57.7% of total market share in August, similar to July.

• Sales growth of non-Covid portfolio stood at 12.8%, Prabhudas Lilladher said.

• Respiratory therapies rose the most over the year earlier among the top 10 categories, followed by analgesics (pain relief) and anti-infectives.

“Acute therapy, especially the anti-infectives segment, is expected to experience a strong growth for the next one year following a slowdown in the past two and half years,” Surajit Pal, vice president at Prabhudas Lilladher, told BloombergQuint.

That's expected to aid the fortunes of few drugmakers. Companies like Alkem Laboratories Ltd. and IPCA Laboratories Ltd. could witness a 15-20% growth due to their anti-infectives portfolios, while Glenmark Pharmaceuticals Ltd., Cipla Ltd. and Cadila Healthcare Ltd., with strong Covid-drug portfolio-led growth, may see a decline, he said.

Companies in the chronic therapies or drugs for long-lasting diseases like heart ailments and diabetes are expected to continue maintaining a steady growth rate, he said.