Hinting at a possible realignment in the list of the top 10 pharmaceutical companies in terms of domestic sales in the near future, the leading three — Cipla, Ranbaxy and GlaxoSmithKline (GSK) — are charting a slower growth as compared to the others in the top rung.
As against an industry growth of 19.2 per cent on a moving annual total (MAT) basis in October, Cipla grew 17.5 per cent, while the sales of Ranbaxy and GSK grew 14.4 and 16.2 per cent, respectively, the latest figures compiled by market research firm ORG-IMS reveal. The growth rate of almost all others — Zydus, Sun, Alkem, Pfizer, Mankind — were above 21 per cent during the same period.
Industry analysts say this indicates a growing need for enhancement of product portfolios and aggressive marketing for the leading companies to retain their position.
“Cipla’s product mix weighs more towards antibiotics, that has a lower growth history. Ranbaxy’s growth has to come through the 1,500 medical representatives that company had added to its marketing force in January this year. GSK has 25 per cent of its sales coming from medicines that are under government price control,” says Ranjit Kapadia of HDFC Securities.
Two companies among the top 10 – the products acquired by Abbott from Piramal and the sales figures of Abbot’s domestic subsidiary – have not been compared here, as the acquisition has technically made Abbott the largest player in domestic market with combined annual sales of Rs 3,214 crore, way ahead of Cipla, the leader otherwise. Cipla had sales of Rs 2,408 crore during the 12 months that ended October 31.
Hemant Bakhru of brokerage firm CSLA said drug firms that show faster growth are primarily focusing on medicines for lifestyle diseases. “The overall market growth continues to pick up, as patient population in this segment continues to grow. The companies will have to choose their therapeutic areas,” Bakhru said. He felt both Ranbaxy and Cipla would improve their growth percentage in the coming quarters. GSK, due to its legacy portfolio, would continue to grow slower.
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Incidentally, all multinational firms, except Abbott after it picked up Piramal’s brands, are depending upon much less brands as compared to their domestic counterparts to propel their growth. For instance, GSK’s Rs 1959-crore sale came from just 182 brands, as compared to 648 brands of Ranbaxy (with an annual domestic sale of Rs 2,161 crore).