Pricing pressures in US, Europe to hit Indian Pharma’s profit margins

Pricing pressures in US, Europe to hit Indian Pharma’s profit margins
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​​The ratings agency said while revenues for these companies in FY23 will be supported by 5-7% YoY growth in the domestic market and 4-5% in the US business, revenues from the European market are expected to contract marginally.

Persisting cost inflation and pricing pressures impact pharma industry: ICRAiStock
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Continued pricing pressures in the US and European markets coupled with regulatory overhang and cost inflation will affect profit margins of major Indian pharmaceutical firms, ratings agency Icra said on Thursday.

The revenues for a sample set of 16 Indian pharmaceutical firms, including the likes of Wockhardt, Torrent Pharmaceuticals, Pfizer, Abbott India, Cipla, Lupin, Sun Pharmaceuticals and Dr Reddy's, are expected to grow by 4-6% in FY2023, marginally lower than the growth of 7.7% in FY2022, Icra said.

However, for FY2024, Icra said it expects the sample set revenues to grow by 6-8% primarily driven by the domestic and emerging markets.

The ratings agency said while revenues for these companies in FY23 will be supported by 5-7% YoY growth in the domestic market and 4-5% in the US business, revenues from the European market are expected to contract marginally.
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