$48 billion by 2018 – How Indian Pharma Can Clock this?

India’s drug industry to touch $48 billion by 2018 Industry may see growth on back of patent expiry of some blockbuster drugs in US and local demand

India’s drugs and pharmaceuticals industry is likely to post total sales of Rs.2.91 trillion ($47.88 billion) by 2018, with an average yearly growth of at least 14%, aided by a rapidly growing domestic market and the newly emerging export opportunity as patents of at least a dozen blockbuster drugs in the US expire in the next three years. “During 2014-2016, about $92 billion worth patented drugs are expected to go off patent in the US as compared with $65 billion during 2010-12,” says an industry analysis report released on Wednesday by Care Ratings, India’s second largest credit rating agency. The domestic drugs industry, which is valued at Rs.1.6 trillion at present, according to Care Ratings, is also expected to grow in the local market with aggressive rural penetration by drug makers, increased government spending on health and growing health awareness among people. The large number of drugs going off-patent in the US presents opportunities for local generic drug makers including Sun Pharmaceutical Industries Ltd, Lupin Ltd, Dr Reddy’s Laboratories Ltd and Cipla Ltd among others. Some of the important drugs whose patent will expire this year include Teva Pharmaceutical industries Ltd’s multiple sclerosis brand Capaxone, which had sales of $4.3 billion in 2013, AstraZeneca SA’s hyperacidity drug Nexium, which had sales of $3.9 billion, and Boehringer Ingelheim’s cardiac drug Micardis, which had sales of $2.2 billion. Anticipating the opportunity, Indian drug makers are building a strong pipeline of products to be sold in the US and have been filing abbreviated new drug applications (ANDA) to the US Food and Drug Administration (FDA), seeking approval for generic drugs. They can file ANDAs five years before the patent expiry date. ANDA is a process where generic drug makers seek approval for marketing the copycat version of patented drugs in the US, typically when the patent expires. Once the generic copies hit the market, the prices of these drugs fall, benefiting patients. Therefore, the government also encourages such filings. The US law allows a six-month exclusivity in the market to generic companies that file ANDAs first. During 2013, Indian companies secured approvals for 39% of the total 400 ANDAs filed. This is significantly higher than in 2012 when 37% of 476 such applications got approvals, according to the report. The domestic market will also see a significant growth in sales on the back of increasing affluence, changing lifestyles resulting in higher incidence of lifestyle-related diseases, increasing government expenditure on healthcare through schemes like the Central Government Health Scheme (CGHS), National Programme for Healthcare of the Elderly (NPHCE), Rashtriya Arogya Nidhi (RAN) and Janani Suraksha Yojana (JSY) in the next three years, according to Care analysis. Domestic consumption of drugs, which has grown on an average of 11% in the last five years, currently accounts for about 47% of the total local production, while 53% goes to export markets. The yearly average growth of drug exports in this period was 19%, which was also primarily driven by increasing demand for generics on the back of patent expiries of several high-value drugs such as Pfizer Inc.’s cardiac drug Lipitor, Roche’s Boniva, and GlaxoSmithKline Plc’s Combivir among others, according to Care Ratings report. India exports pharmaceutical products to more than 200 countries. But US, being the world’s largest generic drugs market, is the largest export market. However, the Care report also highlights risks of the increased regulatory concerns in the US market, which may hamper the revenue prediction for the industry. The US FDA has pulled up several major Indian drug exporters including Ranbaxy Laboratories Ltd, Sun Pharma and Wockhardt Ltd for non-compliance with quality standards in the local manufacturing units. Sun Pharma, the largest exporter of drugs to the US, had to stop exports from one of its manufacturing units in Gujarat in February and has been again put on alert as the US regulator has initiated a surprise inspection at another key unit in the state this week.

•  IPM clocked 7097 Crs in August 2014
•  IPM grew at 8.4% in August 2014

Companies:

• Among the top 10, Mankind grew by 15.6% followed by Cipla at 14.8% & Sun Pharma at 13.3%
• Macleods grew at 31.6%% to become the 10 biggest company in August 2014
• 23 companies crossed the growth of IPM for the month of August 2014 amongst top 50
• Amongst the top 50, Akumentis has the highest growth of 57.7% followed by Apex at 39.4% & Macleods at 31.6%
• 20 Corporates showed double digit growths amongst the top 50
• Among the top 11-20 Macleods has the highest growth of 31.6% followed by Ipca at 27.4% & Intas at 19.4%
• Among the top 51-60, Panacea grew at 27.8% followed by Allergan at 18.2% & Pharmed at 16.7%
• Among the top 61-75, Boehringer grew by 53.8% followed by Corona at 28.8% and RPG at 12.6%

Indian Vs. MNC

• Indian companies have grown at 9.9% versus 4.4% for MNCs in August 2014
• Among the top 50 MNCs Merck grew by 14.4% followed by Ranbaxy at 10.1% & Abbott* at 7.8%
• Under the Non-NLEM category Indian Companies grew at 11.2% whereas MNCs grew at 5.2%

DPCO Vs. Non DPCO Market

•   DPCO 2013 containing molecules market grew at 2.9% whereas non DPCO market grew by 9.6% resulting in an overall growth of 8.4% for August 2014
•  NLEM Category showed positive unit growth at 4.3%
•  The DPCO 2013 portfolio for Pfizer degrew at 17.9%, GSK grew at 14.2% & Ranbaxy grew by 19.5%.

Therapy

• From therapy perspective 10 therapies have outgrown the IPM growth & 6 therapies have double digit growths
• Gastrointestinal market grew at 10.8% , Pain & Analgesics market grew at 10.6%, Respiratory Market grew at 8.5%, whereas Anti-infectives grew at 6.4%
• Anti-diabetic market grew at 17.6% & Cardiac at 6.9%
• Derma market grew by 9.8% & Urology Market at 17.3%

Regional Dynamics

• From regional perspective 14 regions have outgrown the IPM growth
• Jharkhand market grew the highest at 21.2% followed by Madhya Pradesh Market at 17.0% & Uttarakhand-UP West Market at 16.0%
• 1 region had negative growth in August 2014

Molecules

Amoxycillin + Clavulanic Acid Market grew at 24.4% whereas Glimepiride + Metformin grew at 6.9% at No 2.

The markets of Paracetamol grew at 19.5%, Atorvastatin 13.8%, Azithromycin at 22.2%, Probiotic Microbes at 21.2%, Montelukast + Levocetrizine at 21.1%, Glimepiride + Metformin + Pioglitazone at 40.8%, Vitamin-D at 27.6%, Hydroquinone + Mometasone + Tretinoin at 18.9%, Voglibose + Metformin + Glimepiride at 30.1%, Telmisartan + Metoprolol at 39.8%

Brands

• Mixtard continues to lead the pack with 32 Crs for the Month of Aug -14 with a growth of 17.5%
• Augmentin grew at 72.8%, followed by Becosules at 29.2% & Dexorange at 17.7% amongst the top 10 Brands
• Amongst the Brands who have gained ranks include Augmentin & Lantus (+9), Galvus Met (+22), Skinlite (+14), Moxikind CV (+6), Zincovit (+12), Thyronorm (+41), Novomix (+10), SpasmoProxyvon Plus (+191), Panderm Plus (+104), Dolo (+21), Jalra M (+28), among top 100 Brands over August 2013
• Brands that broke into top 200 include RB Tone, Econorm, Onglyza, Sporlac, Montair LC, Refresh Tears, P (Apex) over August 2013
• Among the top brands in the IPM, Galvus Met (47.6%), Duphaston (29.2%), Lantus (19.7%), Pan (18.2%), Glycomet GP (17.7%), Skinlite (17.0%) grew fastest amongst top 30 Brands over August 2013

New Launches in IPM:

•  Total 147 Brands launched in August 2014
•  Cefokem, Glimisave Max & Normoz are the top NIs for the month of August 2014