Domestic pharma industry to clock 4-6% growth in FY21: Icra

The Indian pharma industry is likely to clock 4-6 per cent growth during the current fiscal, according to credit rating agency Icra. The domestic pharma industry has been posting slow growth numbers since March after the coronavirus (Covid-19) pandemic hit prescription generation. However, green shoots started becoming visible in June when the sector clocked a 2.4 per cent growth after a near-9 per cent fall in May and an 11 per cent slump in April.

Gaurav Jain, vice president and co-head, Icra, said, “The global demand scenario is largely expected to remain stable for Indian pharmaceutical industry owing to the inelastic nature of prescription drugs, though some impact on volume growth will be felt owing to the lockdown (lesser OPDs/elective surgeries) and lower economic growth.”

He said that the impact of lower demand will be felt more in less developed countries which are additionally impacted owing to low crude oil prices. Overall, Icra expects the domestic pharma industry to grow at 4-6 per cent in FY21 owing to the coronavirus impact.

Icra, however, estimates that through FY20-FY23, CAGR is expected to be in the range of 8-11 per cent on the back of healthy demand from the domestic market, given the increasing spend on healthcare along with improving access.

The growth in FY21 is expected to be supported by a 1.88 per cent wholesale price index-linked price hike for the domestic price-controlled (products that fall under the National List of Essential Medicines) portfolio.

The Indian pharmaceutical industry’s growth remained stable at 8 per cent during FY20.

According to Icra research, manufacturing activity has gradually started in China with shipments or air cargo arriving in India for APIs, intermediates and KSMs (Key Starting Materials). This has led to a resumption of production by Indian players though the capacity utilisation across plants is yet to reach pre-COVID-19 levels.