Pharma industry to expect muted export growth in 2016-17
The pharmaceutical industry is expected to have muted export growth and stable domestic revenue in 2016-17 as per a report by ratings agency, India Ratings.
February 07, 2016: The pharmaceutical industry is expected to have muted export growth and stable domestic revenue in 2016-17 as per a report by ratings agency, India Ratings.The overall pharma exports are expected to grow by about 5 per cent while the domestic pharma market is expected to grow by 8-10 per cent in the next fiscal.
"The recent increase in US regulatory actions against domestic pharmaceutical companies is likely to restrict growth of exports to the US. Higher depreciation of emerging market currencies is also likely to impact export growth to semi-regulated markets. We expect the overall Indian (pharma) exports to grow at about 5 per cent in FY17," India Ratings stated in its report.
The domestic pharmaceutical market grew by 12.1 per cent in FY15 to reach Rs 90,000 crore while pharmaceutical exports recorded modest y-o-y growth of 5 per cent in FY15 to reach Rs 94,200 crore.
The key factors driving growth for the domestic market have been increasing healthcare spending by the government, demographic trends, increasing disposable income and higher incidence of lifestyle diseases . The market will, however, remain exposed to any expansion of the price control regime. Though expansion of the drug price control regime could have an impact on the topline growth of companies temporarily, a likely improvement in volume sales over the medium term could offset the impact, the report stated.
The report also stated that the growth expectations also continue to rest on the USD 19 billion worth of drugs which are likely to go off patent in 2016.