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Growth trajectory for pharma industry likely to remain at 10-13% in FY21: ICRA
Jan-29-2020

Ratings agency ICRA in its latest report has said that the Indian pharmaceutical industry's growth trajectory is likely to remain at 10-13 percent in the next financial year (FY21) despite challenges. It noted that the expected growth in the next financial year is on account of healthy demand from the domestic market given increasing healthcare spending along with better accessibility. It added that this along with abatement in pricing pressure for the US market, new launches and market share gains for existing products and consolidation benefits will drive growth in FY21.

According to the report, pharma industry's growth remained stable at 12.2 percent during H1 FY20 led by rebound in domestic growth in Q2 FY20 to 14.2 percent supported by seasonal factors and stable growth in chronic therapies. It stated that during Q2 FY20, India observed outbreak of many diseases in many parts, aiding the growth of the anti-infective segment. It noted that though margins remain healthy, pricing pressures for the US base generics business (albeit moderating), lack of limited competition products and manufacturing quality issues will continue to put margin pressure.

The report further said that higher share of domestic business and operational efficiencies will provide overall cushion to margins. It also said the key sensitivities to growth and profitability estimated of the Indian pharma industry will be regulatory interventions such as price controls and compulsory genericisation for domestic market and continued regulatory overhang with respect to manufacturing quality deficiencies during USFDA audits.

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