Domestic credit rating agency, ICRA in its latest report has said that growth of the domestic pharmaceutical industry is expected to remain moderate due to slowing growth in the US, increased regulatory scrutiny and consolidation of supply chain in the US market. However, the agency also said that the adequate scale and drug development capabilities gained by industry would help to keep them in good stead to capture new opportunities in the US market.
The report noted the slowdown in revenue growth from the US, which dropped to 12 per cent in the first nine months of the current fiscal from 15 per cent in the last fiscal, 2015-16 and 33 per cent CAGR during 2011-15 despite consolidation and currency benefits. Further, it added that the continued regulatory interventions in domestic market are expected to put some pressure in near term though long-term growth prospects for domestic pharmaceutical market remain healthy given increasing penetration, accessibility and continued new launches.
The rating agency said that the domestic formulations business of companies within their sample registered growth of 9.3% in Q3 FY2017 as against 14.1% in Q2 FY2017, with demonetization resulting in channel de-stocking though the growth should come back in the next few months. The report however said the domestic pharma industry has gained adequate scale and drug development capabilities over the last decade of growth which would “keep them in good stead to capture new opportunities in the US market”.