‘’Monsoons are closely linked to uptake of medicines’’

How is the onset of monsoon going to shuffle the Indian drug market?

If you look at the IMS Health market report, it clearly indicates that monsoons are closely linked to uptake of medicines. In the Q3 i.e from July to September, when monsoons are at their peak across the country, it is also the highest contributing quarter for the market. For the last four years, this quarter has contributed at an average of 27 per cent to the market.

As far as chronic therapy drugs are concerned, they remain fairly stable across seasons, whereas, acute therapies show the maximum uptake during monsoons. The linkage is even more evident as in 2012, when there was a shift in the peak sales of acute drugs, on account of delayed monsoons.

What is the current size of the market for drugs that are mainly used to treat diseases which are more prevalent during monsoon?

Therapies which are broadly used to treat monsoon related ailments and which generally spurt during this period total up to Rs 33113 crores (MAT April 2013), and contribute ~45 per cent of the total market. Anti-infectives (antibiotics), gastro intestinals, pain/analgesics and respiratory drugs are the main categories that comprise this group.

How has the market for such drugs evolved over the years in India?

Acute therapies (which constitute ~70 per cent of the total market) have posted a double digit compounded annual growth rate of 13.7 per cent over the past four years. Though this is an impressive performance, chronic therapies in comparison have posted a significantly higher CAGR of 18.9 per cent over the same period.

Besides the monsoon, which other factors decide the diseases patterns?

The India market is still dominated by acute therapies and this is likely to continue for some time. Monsoon season does contribute to different disease patterns; however, improving literacy and hygiene conditions along with growing urbanisation is also affecting disease patterns and gradually expanding the prevalence of lifestyle related chronic conditions (cardiac, diabetes, CNS, etc). As a result besides acute therapies, we are seeing increasing contribution trend from chronic therapies to the overall market.

Since the last few years, monsoon pattern has changed considerably. Has this made pharma companies change their strategies and also modify their product categories?

The table shows the top 20 companies by their acute / chronic portfolio. As can be seen, most companies are skewed towards acute therapies, with Glaxo Smithkline, Alkem, Aristo Pharma, Pfizer and Mankind having more than 80 per cent contribution from this segment. On the other hand we also see companies like USV, Sun Pharma and Torrent who have more than 60 per cent contribution from their chronic portfolio.

Companies with higher contribution from acute therapies may see relatively higher seasonal fluctuations in performance on account of high dependence on acute therapy areas and varying demand for such therapies. Also as mentioned above, these therapies are growing slower than the overall market.

Will pharma companies continue to lean more towards chronic therapies?

Over the years we do see companies consciously shifting their focus towards the faster growing chronic therapies, that promise long-duration treatment, and can to some extent ensure that performance is more stable and predictable. Lupin is a good example which clearly illustrates the successful implementation of this strategy.

sachin.jagdale@expressindia.com