Indian Big Pharma companies buck the global economic trend

India's top 25 pharma companies continue to go from strength to strength

At a time when strong competition, quality issues and economic slowdown are being experienced in developed countries, India’s top 25 pharmaceutical companies are registering impressive growth in their global business, despite the fact that a slight slowdown has been reported in the Indian pharma sector.

A recent study shows that they recorded global revenue growth of 27.6% during 2012–13, compared with 13.8% growth in their domestic sales revenue. Ranbaxy Laboratories registered sales of €1.18bn (Rs 101bn) and Dr Reddy’s Laboratories €1.14bn (Rs 97bn), while Sun Pharmaceuticals had sales of €899m (Rs 76bn); even Lupin managed sales of €808m (Rs 69bn) and Wockhardt touched €541m (Rs 46bn).

Sanofi has been the fastest growing multinational drug company in India for five consecutive years. Its revenues have consistently risen from €121m (Rs 10bn) in 2008, to €152m (Rs 12bn) in 2011, and €175m (Rs 14bn) in 2012. Sanofi’s performance stands out because the Indian pharmaceutical market has grown by just 9.8% in 2013, compared with 16.6% in 2012.

The slowdown in the industry has rung some alarm bells. Market observers say it can be attributed to the new drug pricing policy and the regulatory interventions over the past year. ‘The economic environment in India is tougher now than ever before,’ said Sujay Shetty, leader of the pharma and life sciences vertical at PwC India. ‘While pharma companies focus their attention on measures to combat the growth slowdown, they will need to work with the government and other stakeholders to resolve regulatory challenges.’

The slowdown is also reflected in the fall in the number of new product launches, down from approximately 1,900 in 2010 to 1,700 in 2012. However, there have been close to two dozen pharma merger and acquisition deals in the 2013 calendar year, of which around half were domestic deals. Hyderabad-based Granules India is acquiring privately held active pharmaceutical ingredients (API) company Auctus Pharma, which has an API facility in JN Pharma City near Visakhapatnam in South Indi, and an intermediates facility at Bonthapally.

Granules has also announced the opening of a 10,000ft2 R&D facility in Hyderabad, which will focus on full scale generic API development.

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