Care Ratings in its latest report has said that the COVID-19 pandemic push will lead to an 11 percent annual growth for the pharma sector over the next two years and help it surpass $60 billion from around $45 billion in FY21. It expects this faster growth to be driven by the ability of the domestic industry to leverage the opportunities arising from the expiry of the many patented drugs across the globe, ebbing of regulatory risks, adoption of various de-risk strategies from China dependency for key raw materials, increasing PE investments, and strong fundamentals of the industry.
The report has stated that the domestic pharma industry globally ranks third in terms of volume and 13th in value terms, which is primarily because of the predominance of generics. It said the industry has been clipping at a compound annual rate of about 7.2 per cent between FY17 and FY21. In the past fiscal, the industry clipped at 12 per cent, thanks to the pandemic-related demand.
As per the report, over the next five years, the patented drugs worth $240 billion will go off-patents globally. This provides a large opportunity for domestic generic formulation companies who are already developing the generic versions of these patented drugs to cash in on early and are expected to reap $5-6 billion of additional income. It added that the focus on generics has the domestic country enjoying significant cost advantages in terms of production, R&D and clinical trials over the developed market to the tune of 50, 87 and 90 per cent, respectively.
