Pharma exports get a boost as nations depend less on China

Mumbai: India’s domestic pharma companies have seen their exports, especially of anti-viral drugs such as hydroxychloroquine (despite its weak evidence in curing Covid-19) Favipiravir and Remdesivir, to non-regulated markets grow as several countries chose to cut down their exposure to China, data from rating agency CRISIL and the ministry of commerce showed.

“Chinese supply disruptions in early 2020 and persistent quality issues provide opportunities for Indian players as customers look at India as an alternative supplier of bulk drugs. Further, Indian API exporters have been able to garner good realizations on their exports during the first half of this fiscal”, CRISIL in a report.

From April 2020 to September 2020 the domestic formulation industry grew 32%, with India’s share in export markets such as US, Europe and African countries growing in double digits. In its New Year outlook for the Indian healthcare sector, brokerage firm Jefferies said it remains bullish on India’s healthcare sector.

2020 was the best in recent years with the Pharma index outperforming Nifty by 45%, Jefferies wrote in its report published on Wednesday, adding that Indian exports are set to gain on a stable pricing environment and complex product launches.

One of the factors driving the bounce-back of the Indian pharma export has also been the stable US market which had chipped away revenues of several Indian drug companies because of regulatory and pricing issues. Jefferies noted that after several years of the hyper-competitive environment in US generics, market forces have kicked in to ensure excess competition has moved out.

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Large Indian manufacturers appear to have been key drivers of generic price erosion, driven by their cost advantage and willingness to do business at lower gross margins, said Piyush Nahar, equity analyst Jefferies. “Things are changing on the margin as Indian companies are starting to get complex product approvals and the phase of volume-driven gains being the sole growth driver also appears to be ending”.


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