Indian pharmaceutical groups have become the largest generics manufacturers in the world over the last few years–companies such as Cipla, Sun Pharmaceutical, Lupin and Dr Reddy now deliver multi-billion revenues. Revenues by the Indian pharma was $29.6bn in 2017, with a 30% CAGR over the last decade. 2/5 of the sales were generated in the US, which is still by far the largest market in the world: indeed, the FDA has approved approximately 550 Indian production sites providing 90% of the generics sold in the US.
The FDA does not approve the Indian companies’ dominant position in the generics market, therefore it always aims at approving new Asian sites outside India. Therefore sales of Indian generic drug producers over the last two years have not increased as much as in the past, and profits have decreased. The Mumbai Stock Exchange index including all the Indian pharma companies’ shares has dropped over 25% in the last two years, whereas the Indian stock market has risen over 40%. Indian firms have not stood on the sidelines and are now apparently investing increasing amounts on research, to the extent that the top 7 Indian groups together invest $1.5bn in R&D. Moreover, according to analysts, Indian generic producers show a stronger consolidation trend, likely to result in a price cut and a better market position as compared to their Asian competitors.
(Source The Economist)