Indian Economy News

India eyes 15% jump in medicine exports this fiscal

Hyderabad: Indian drug makers are hopeful of achieving double digit growth in exports this fiscal after being confined to single digit growth for two years, helped by factors such as several medicines going off patent, strengthening dollar and access to new markets in Asia.

"We hope to achieve 10-15 per cent growth in export of pharmaceutical products during the current fiscal," said PV Appaji, director general at Pharmaceuticals Export Promotion Council (Pharmexcil). This optimism is driven mainly by anticipated increase in the US Food & Drug Administration (FDA) approvals as a large quantum of medicines are going off patent.

"Increased focus of Indian drug makers on complex and high value generics and growing acceptance to our generics in key new markets like Japan and appreciating dollar should also help us achieve the targeted exports," Appaji told ET.

India failed to achieve targeted growth in export of medicines in the last two years. As against the targeted growth of 10 per cent during 2014-15 set by the commerce ministry, the country's pharmaceutical exports saw only 5 per cent growth at Rs 95,000 crore, largely on account of delayed regulatory approvals and price erosion due to increased global competition.

The North American market, which accounts for nearly a third of the country's pharmaceutical exports, proved a drag on revenues of several domestic drug makers, owing to slower product approvals in the US and piled up applications before USFDA.

Increased scrutiny and import alerts by the global drug regulators on facilities and products of Indian drug makers over the last couple of years, too, had adversely affected exports and profitability of several large medicine manufacturers, Appaji said.

Currency devaluations and geopolitical uncertainties in certain countries like Russia, Ukraine, Venezuela and Brazil also contributed to lower than anticipated exports.

Things are expected to improve this year. Large Indian drug makers such as Dr Reddy's Laboratories, Lupin, Sun Pharma, Glenmark and Aurobindo Pharma have lined up several complex generics for launch and are waiting for global regulatory approvals.

Many of them expect double-digit growth in sales this fiscal, anticipating quicker approvals.

GV Prasad, co-chairman and chief executive officer at Dr Reddy's, said India's second largest drug maker is targeting double digit growth this year. "Europe started to turn around and it is profitable now due to new launches. We are looking at working with a partner to enter in to the lucrative, however difficult, Japanese market," he said. The Hyderabad-headquartered company's chief operating officer Abhijit Mukherjee said the company was expecting increased ANDA approvals this fiscal.

Dr Reddy's, which has clocked $1 billion revenue from the US market alone, has 68 ANDAs pending for approval before the FDA for months. Analysts tracking the sector project faster regulatory approvals to drug applications under the FDA's new Generic Drug User Fee Act in the place of existing system that took at least 30 months for approvals.

"The target set by India of achieving double digit growth in exports appears to be feasible," said Alok Dalal, pharmaceutical analyst with CLSA.

Nitin Agarwal, analyst with IDFC Securities, expects FDA to review and act on 75 per cent of the ANDA applications within 15 months of submission.

Neha Manpuria, analyst with JP Morgan, in a report released in January had said, "Growth in the US has been affected by the lag in new product launches. While the trend so far has been tepid, any pickup in ANDA approvals would be a key driver for growth in the near term."

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.