According to a recent report from Fortune Equity Brokers, the BSE Healthcare Index has outperformed the overall Sensex, posting 21.1 per cent returns in the last two years in comparison to negative 3.7 per cent returns given by the benchmark index. The report analyses that this performance is due to the excellent results posted by Indian pharma companies, which in turn have been primarily driven by patent expiries in the US and high domestic growth. Considering the fact that there are some major launches coming in the US, high-teen domestic market growth and further penetration is expected in emerging markets, it is expected that the sector’s growth would continue.
The US will continue to be a good growth driver for the sector since nearly $61 billion worth of drugs will go off-patent from 2012-15, with $ 29 bilion in 2012 alone. Indian companies have scaled up their R&D activities in the last few years to focus on more complex and difficult to manufacture drugs, which will continue to drive sales post the patent cliff. The reoprt highlights a few therapy segments that the Indian companies are targeting and the competitive landscape in the space.
Domestic pharma market slowed down in H1FY12 after posting over 15 per cent growth in FY10 and FY11, which was majorly due to high base of dengue in FY11. However, the market has recovered in H2FY12 returning back to the original growth rate. It is expected to continue due to field force expansion by Indian companies, combined with increasing focus on chronic therapy which is growing over 18 per cent every year.
Indian companies have also started focusing on emerging markets and have created a good field force in the key markets of LATAM, Russia, Africa and APAC. These emerging markets are expected to be as promising as India and to be their next driver of growth.
EP News Bureau — Mumbai
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