Pharma exports likely to get a boost on coronavirus vaccine shots

However, he said that many countries, especially the European Union, are likely to step up production and increase their portfolios in an attempt to reduce import reliability.

For the pandemic-hit year, the Indian pharmaceuticals industry is likely to post nearly 20 per cent growth in exports. On the domestic front, too, the market growth is back, albeit in low single digits, after the lows of the lockdown months. 

What's more, the outlook for 2021-22 is robust — both for exports and the local market — riding on the back of vaccines. 

Indian exports may grow at 11-12 per cent inclusive of additional opportunities of the Covid-19 vaccine, said Uday Bhaskar, director-general of Pharmaceuticals Export Promotion Council (Pharmexcil), a ministry of commerce outfit. "As India has large capacities to manufacture vaccines, it may have around 15 per cent share by the number of doses of the Covid vaccine market globally," Bhaskar said. 

However, he said that many countries, especially the European Union, are likely to step up production and increase their portfolios (mainly in the bulk drugs category) in an attempt to reduce import reliability. Indian exports are still likely to grow, thanks to affordable pricing. During the year, India emerged as the go-to country for several drugs like hydroxychloroquine (HCQ). India ramped up production of paracetamol to meet global demand, and met a significant portion of the sudden demand for key steroids used in Covid-19 (dexamethasone and methylprednisolone), Bhaksar said. Now that the pandemic is plateauing, demand for cardiovascular and neurological drugs is set to rise from several countries as the supply chains are restored. 

"India had adequate stocks of both bulk drugs and formulations to meet most of the sudden rise in demand after April. It could also quickly locate alternate bulk drug supplies (some from Europe) as well as step-up local production," Bhaskar said. 

As of April-October 2020, India's pharma exports stood at $13.88 billion and is growing at 15 per cent. "We expect FY21 to close with exports around $25 billion," he said. This would be a 20 per cent jump over last year. 

Indian pharma companies have garnered nearly 45 per cent of all new abbreviated new drug application (ANDAs) approvals over the past nine months, according to India Ratings analysts. This would aid in exports growth in the coming financial year. 

The one thing that ailed the Indian Pharma Market (IPM) in 2020 was volume growth. The volumes fell by 11.2 per cent in the June quarter (the lockdown hit quarter), by 6.4 per cent in September quarter, and by 3 per cent in October and November, according to market research firm AIOCD AWACS. In comparison, the price growth has been in the range of 4-5 per cent across therapies. 

With low patient footfall in clinics, partly due to fear and partly as people fell less sick with gastrointestinal and flu illnesses, the volumes in the acute segment (drugs used to treat an episodic illness) have lagged. Chronic therapies like cardiovascular and diabetic have done well. But now, the domestic market has started to re-balance itself as unlocking is in motion, according to companies. 

'Re-balancing' of acute and chronic segments has begun and the December quarter would show this to some extent, according to Kedar Upadhye, the global chief financial officer of Cipla. Cipla, which has come up with a wide range of Covid-19-specific drugs like remdesivir, tocilizumab, etc, said it formed task forces and made special efforts for business continuity during the pandemic. 

"We have seen growth in both acute and chronic segments. The overall decline in volumes in the IPM is thanks to therapies like anti-infectives, gastrointestinal, dermatology, pain, and analgesics, etc,” Upadhye said. 

Industry watchers said 2021 will see the revival of acute therapies and people would move around freely. 2021 would see demand for anti-infectives rise, and with it, the associated therapies will grow, said Rakesh Dave, president, AIOCD AWACS. Antibiotics, part of anti-infectives category of therapies, induces prescription of associated therapies like vitamins, pain and analgesics and also proton pump inhibitors (to reduce stomach acid production). When someone visits a doctor with an infection and fever, the prescription would have these supporting drugs along with antibiotics, Dave said. 

"Sales of antivirals are up now in the anti-infectives category. If antibiotic sales also pick up, the overall market would get a boost. As such antibiotics, vitamins, PPIs and pain-medicines make up over 40 per cent of the IPM,” he said. 

Once acute therapy growth comes back, the IPM would post good growth numbers on a low base of 2020, said Tushar Manudhane, an analyst with Motilal Oswal Securities.