Pharma exports from India to reach $20 bn by 2020
The Dollar Business Bureau
Pharmaceutical exports from India could go beyond $14 billion mark in 2016, touching $20 billion by 2020 and witnessing a compounded annual growth rate (CAGR) of around 8 percent, a study conducted by ASSOCHAM and TechSci Research released on Thursday said.
“However, the growth in exports of pharmaceutical products from India may drop by at least half to around 8 percent during 2015-2020, from the CAGR level of 15 percent recorded during 2010-14. The decline is due to delay in approvals from regulatory bodies in major markets of the world such as US, Russia, Africa, etc,” said the joint study conducted by ASSOCHAM and TechSci Research.
The study also highlighted that consolidation of pharmaceutical players is driving the surge in pricing pressures for generic firms present in the US market, which is likely to result in a drop in annual growth of pharma exports from India over the coming five years.
India is the largest supplier of medicines to the US. India’s pharmaceutical exports to the US increased to $3.7 billion in 2014, from $3.4 billion in 2013, on account of rising demand for quality generic medicines in the country’s market.
On the other hand, the rate of growth for pharmaceutical product exports from India to the US is falling, due to intense scrutiny by the US Food and Drug Administration (USFDA) on the quality of pharmaceutical products entering US from manufacturing plants situated in India, said the report.
The study suggested that in order to enhance the exports growth rate, Indian firms will require to leverage their compliance to USFDA regulations.
India’s currency crisis is affecting the pharmaceutical products market in Russia. Therefore, stabilisation of exchange rate is of high importance to generate revenues through exports.
Besides, several Indian firms are operating via the Pharmaceutical Benefits Programme (PBP) and hospital tenders, for shipping crucial and essential drugs, the prices for which are controlled by the Russian government.
Likewise, pharmaceuticals exports from India to Africa are being hit due to delays at port and lengthy custom valuation.
While releasing the study, D S Rawat, Secretary General, ASSOCHAM, said, “Exports of pharmaceuticals are a key factor contributing to the industry growth in India with the US and few rapidly growing markets such as Brazil, Russia, Mexico, South Africa and countries in South-East Asia are also emerging as the key markets for exports of generic drugs.”
“Pharmaceutical industry in India has transformed from just being a manufacturer of generic drugs to offering complex drug formulations to international markets, thus, witnessing a considerable growth,” said Rawat.
“India’s pharmaceutical market is being led by socio-economic shifts, increasing sedentary lifestyle of the people and projected growth in the number of people ailing from diabetes, obesity, cardiac issues and other related diseases,” he added.