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Domestic pharma biz feeling the heat
Lack of focus on Arogyasri also affecting pharma sector in Telugu States
Hyderabad: In tune with the other sectors that got affected by the economic slump, the domestic pharmaceutical market also slowed down to a seven-quarter low, said an expert adding, "The deepening slowdown in the domestic drug market will intensify profitability challenges for pharmaceutical companies."
Speaking to The Hans India, S V Krishna Prasad, Founder & CEO, Cito Healthcare, said: "Domestic pharma sales which were at 7.9 per cent in April 2018 have slumped to 6.6 per cent in June 2019 from an average of 10 per cent in the preceding five months.
Echoing a similar view, Ravi Uday Bhaskar, Director General of The Pharmaceuticals Export Promotion Council of India (Pharmexcil), said: "The domestic pharma industry that witnessed close to 11 per cent growth in the last few fiscals has registered only 9.5 per cent growth in H1 of the current fiscal." However, he added that the market has improved in Q2 registering a growth of 11.5 per cent.
Prasad Kompella, CEO & Executive Director at Sanzyme said that weakness in domestic business persisted in Q1FY20, but the industry is picking up in the second half.
"We thus expect most companies to report between 5-10 per cent growth in India." Enlisting the causes of the slowdown, Prasad said, "Delay in the onset of the monsoon and low incidence of infections are set to have weighed on the offtake of acute therapy products."
"GST resulting in low inventory stocking post its implementation was another reason for the slowdown in pharma sales," he added.
To stay in competition on value chain for a better drug portfolio, India's focussed investments on R&D and marketing development are bringing its costs up in the short run though they pay up in the long run.
Prolonged slowdown in India can intensify cost pressures, at least till the time these new investments begin to pay off, he opined.
Vijay Reddy, MD, Seasons Healthcare, opined that recession, in general will have a domino effect and also a cascading effect.
In his view, the current recession is because of drastic reduction in capital expenditure by governments both in centre and state.
In the Telugu states it is Arogyasri scheme that has been driving the growth in local pharma and medical sectors. But both the states are severely running short of money.
Dr Nanjundappa, Director, Clinical research and Business development, Essence Pharma Services felt that recession does not affect pharma industry. Quality of medicine and regulations made in India affect it.
The quality of research work done in India and attitude towards research and ensuring work done of quality will help the pharma industry to tide over the current crisis, he said.
