Indian pharmaceutical industry is expected to touch US$ 55 billion by 2020 as against the current size of US$ 18 billion but the exports may slow down to grow at a CAGR of 7.98% in value terms due to tightening of regulatory mechanism in top exports markets of US, Russia and Africa, reveals the joint study.
The joint study undertaken by ASSOCHAM and TechSci Research says, in addition consolidation of pharmacy players in North America have resulted in the presence of leading players that hold better bargaining power. Major instances are the acquisition of the US distributor Celesio by US pharmacy Mckesson's in 2014, and formation of a joint venture between the US wholesale distributor, Cardinal Health, and CVS Caremark in 2013.
Consolidation of pharmacy players is leading to an increase in pricing pressures for generic companies existing in the US market, which is expected to result in a decline in the year-on-year growth of pharmaceutical exports from India over the next five years.
Further, a steep decline in currency in emerging markets like Africa, Russia, Ukraine and Venezuela, is expected to add woes to drug manufacturing companies that supply pharmaceutical drugs to that region, and are unable to generate high revenues on account of selling their drugs at a low priced currency.
(Continued on the next page)