Drug firms expect rebound in domestic biz

Firms faced pressure in first quarter due to price cap and drug ban

Drug companies are expecting an uptick in domestic sales, following a muted quarter which saw business slow down due to price caps and government ban on fixed dose combination drugs.

Domestic sales grew 6.4 per cent in April-June quarter in comparison to 14.8 per cent in the same quarter last year, according to  data from the All India Organisation of Chemists and Druggists. Overall sales were impacted due to the 14.6 per cent  de growth in fixed dose combination drugs in the same period. The other overhang price capping, following the revision of National List of Essential Medicines.

In post-result conference, Cipla's Chief Operating Officer Umang Vohra said growth had been impacted due to government policy action and expressed hope that sales will pick up in the second quarter. Cipla which earns 40 per cent of revenue locally saw five per cent growth in domestic market in the first quarter of FY17. In the same quarter last year, the domestic business had grown by 8.5 per cent.

“We will continue with strong growth in our key markets – India and South Africa,” Vohra said last week. New product launches in urology, dermatology and gastrology are expected to drive growth for Cipla this year.

Other companies are optimistic too of a better show in the coming months.  “Our India business has continued to outperform, as per IMS data, India business has grown 12 -15 per cent and on full-year basis we expect it to grow at 15 per cent despite few of our products being under price control and fixed dose combination issues. Further, the launch of Digihaler – India’s first digital dose inhaler and other initiatives will drive our India business growth significantly,” Glenmark chairperson Glenn Saldanha said.

Lupin’s domestic sales too grew 5.2 per cent in Q1 FY 2017 on a year on year basis much slower than 11 per cent growth notched in first quarter last year. In a post result call with  analysts Lupin's group president of formulations in India  Shakti Chakraborty said company faced pressure in Q1 due to revision in National List of Essential Medicines but said this was an one off factor.  

Lupin is expecting double digit growth for the remaining three quarters.

“We also restructured our business. Four verticals of the business have been restructured. It took about two-three months to settle down. Everything is behind us now. I think going forward we can see only growth,” he stated.