Indian pharmaceutical industry to sustain at 8-10 per cent in FY2024: ICRA insights – ET HealthWorld | Pharma


Gurgaon: ICRA released its insights on the domestic pharmaceutical industry, projecting 8-10 per cent revenue growth for the fiscal year 2024. Despite enduring several disruptive events over the last few years, the Indian pharmaceutical market (IPM) witnessed a healthy compound annual growth rate (CAGR) of 9.7 per cent between FY2014 and FY2023.

Growth in recent years has largely been supported by price increases and new product introductions even as volume growth has been negative or 2-3 per cent at best.

ICRA expects growth for its sample set of 25 companies, accounting for ~60 per cent of the Indian pharmaceutical industry to sustain at 8-10 per cent in FY2024. This is likely to be supported by continued price increases, new product launches and rising penetration of healthcare services in semi-urban and rural areas.

Acute therapies, accounting for 62-65 per cent of the IPM, have continued to outpace growth in chronic therapies since FY2022. However, the trend is expected to reverse going forward. With an increasing incidence of lifestyle diseases and given the long duration of medicine courses for chronic diseases, the growth of chronic therapies in the IPM is expected to be higher than that of acute therapies.

At present, revenues from drugs under the National List of Essential Medicines (NLEM) constitute ~17-18 per cent of the IPM, with some companies deriving ~30 per cent of revenues from the NLEM drugs. The price increase granted for drugs under the NLEM has been higher at 12.1 per cent for FY2024 due to sharp WPI inflation. This is the second consecutive year of double-digit price increase allowed for NLEM drugs.

Proposed change in National Medical Commission (NMC) regulations to support genericisation. The NMC recently released new norms for doctors that require them to only prescribe generic drugs instead of certain brands. These changes support the GoI’s focus on driving generic prescriptions to reduce healthcare costs for patients. However, this could impact the branded generic formulations for manufacturers over the long term.

  • Published On Sep 15, 2023 at 02:12 PM IST

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