Delays in regulatory approvals in North America could halve expected growth rate
India stands to miss its export target during the curent fiscal year because of delayed regulatory approvals and consolidation of pharmacy players in North America. The Pharmaceutical Exports Promotion Council of India (Pharmexcil), which comes under the Indian commerce ministry, estimates that the pace of growth has halved to around 5% in the year to March from the original projection of at least 10%.
The US accounts for nearly 40% of the global pharma sales of US$980bn. India's drug makers export products worth more than $4bn to the US out of total annual pharma exports of around $15bn. Although large firms like Ranbaxy Laboratories, Sun Pharmaceutical, Dr. Reddy's and Lupin account for around $3bn of exports to the US, the rest comes from dozens of small drug makers.
However, a research report from India Ratings and Research (Ind-Ra) has noted that India’s pharma exports are expected to grow at a rate of 10-12% to reach $17.67bn by 2015-16, compared with $14.62bn in the last fiscal year.
However, growth is likely to be slower. Though Ind-Ra has said that action by overseas regulators could affect exports, it has pointed out that any further sweeping actions, including imposing substantial penalties, would hit bottom lines and credit profiles of domestic market players. The report points out that Indian manufacturers are likely to face fewer regulatory hurdles in FY16 on strengthened quality and control processes. In 2014, import alerts reduced to eight from 21 in 2013, due to quality measures implemented by companies.