Indian pharma's window of opportunity

Call it opportunistic volume gain at better margins or seeking new growth options under adverse market conditions. Either way, some of the leading Indian pharma companies are pitching in to cater to the markets that some of the big global pharma companies are vacating as part of their product optimisation strategies.

They are also pitching in to fill in for the temporary shortages that some of the companies have caused due to issues such as regulatory challenges their plants face. Agile companies that can meet this gap and in turn expand their market share see this as an opportunity.

One such company is Hyderabad-based Aurobindo Pharma, which has even given it a name 'New Business Opportunity'. The move, apparently, is yielding results. Aurobindo has received an opportunity to supply an incremental volume worth $90 million to $100 million over a span of 12 to 15 months starting second quarter of FY18. In fact, the company has also been building capacities so that it is ready to meet the demand.

Analysts believe companies such as Lupin, Torrent Pharma, Alembic Pharma, and others are also capable of leveraging their strengths to gain market share because of these developments in the US market.

This is crucial for Indian pharma that has been largely hurt by pricing pressures in the US, a key market, coupled with regulatory challenges some of their plants face in India. However, over the past three to six months, the pricing pressure is apparently showing some signs of relief with temporary opportunistic market gain potential in the US.

Analysts, in fact, talk of some 20 to 25 products, where industry has seen better pricing in the US over the last three months thanks to this trend. Some of the leading companies, they say, note that the price erosion has stopped in their base business and volume gains are coming in. This may come in as a relief for Indian pharma players.

Most of the Indian pharma companies have seen extreme pricing pressure in the US over the last two to three years because of channel consolidation (buyer consolidation) and faster approvals for ANDAs, leading to more competition.

While those challenges still persist, there is also some consolidation happening at the manufacturers' side. For instance, pharma majors such as Teva, Mylan and even Sun Pharma, the biggest Indian pharma company, have decided, as part of their product portfolio optimisation, to move out of the products that do not make commercial viability for them.

Source: https://www.businesstoday.in/sectors/pharma/indian-pharma-is-window-of-opportunity/story/293106.html