Domestic pharmaceutical sales growth slipped to 5.5 per cent in 2017, the lowest in last eight years as the business was impacted by GST roll out, delayed product approvals and inclusion of more products under price caps. On an industry wide basis pharmaceutical companies recorded sales of Rs 1.16 trillion in 2017 which was 5.5 per cent higher than the previous year. In 2016 industry wide sales grew 10.7 per cent to Rs 1.10 trillion, according to AIOCD-AWACS, the market research wing of All India Organisation of Chemists and Druggists (AIOCD). Drug makers. however, are confident of revival in 2018 with launch of new products and increased market penetration though some experts believe that growth will be hinged on government policy actions. AIOCD-AWACS pointed out that contribution of price rise to sales growth fell sharply and turned negative in 2017 indicating impact of government's pricing actions. Contributions to sales growth from new products too fell compared to 2016. In fact, industry-wide sales growth fell to single digit in 2017 for the first time since 2009. “Growth has been impacted due to regulatory actions. In 2016 the government banned over 340 fixed-dose combination drugs. Further there have been delays in approval of new drugs. The industry will continue to suffer unless correct policy decisions are taken,” said D G Shah, secretary general of Indian Pharmaceutical Alliance. Last month, the National Pharmaceutical Pricing Authority eased the approval process for new drugs following a six months tussle with the industry. Over hundred product applications were held up and are expected to be cleared following changes in norms. There were other headwinds too.
The goods and service tax led to disruption with distributors cutting down inventory in the run-up to the tax introduction in July. The industry-wide sales declined 2.4 per cent on a year on year basis in July. Recovery was slow and in August and September sales growth was under 3 per cent.
But drug makers feel that recovery is around the corner. “After a quiet first six months of the financial year, we have seen the pick up secondary sales growth across major segments. This revival has been across major therapeutic areas and we feel that the industry growth will bounce to its normal levels in coming months,” said a Glenmark spokesperson. Lupin's India region formulations head Rajeev Sibal too expressed optimism. “The last two quarters of the year showed definite signs of recovery which is reflected in the 7.8 per cent growth for the quarter ending December. Lupin's India formulations sales grew 24.3 per cent during second quarter FY 18 on a Q-o-Q basis and 16.4 per cent on a Y-oY basis," he said. Chronic therapies like anti-diabetes drugs have been growing at a faster clip than acute therapy drugs since 2013 and trend continued in 2017. Vaccines and chronic therapies including anti-diabetes drugs and dermatology products showed the fastest growth in 2017 while anti-infectives and antimalarial drugs showed a decline. Diabetes segment sales showed 14 per cent increase driven by new product launches and rapid growth in sale of anti-diabetes drug molecule teneligliptin which has been introduced in over 100 brands in two years. Teneligliptin drugs now have a market size of over Rs 500 crore. “ In 2017 our diabetes and vaccine business grew by 13 and 46 per cent respectively. Our consumer healthcare business grew in line with market. Even during disruptions in 2017 we ensured uninterrupted supply of all our medicines and availability to chemists,” said a Sanofi spokesperson.