Returns down from US generic drugs market for Indian pharma firms

This decline was primarily for two reasons. One, commoditisation of generics led to price erosion. Two, investments increased in both R&D and in expansion

While the top 10 Indian drug companies’ share in the US generics market has nearly doubled over the past five years, the sector’s average return on capital employed (RoCE) has declined.

Firms, however, expect the pricing pressure to easing in the US over the coming quarters. The generic drug market size there is around $60 billion a year.  

International players such as Teva, Mylan and Sandoz, which earlier dominated the generics space by aggressive inorganic investment, are facing the heat due to excessive debt. “In an attempt to cut flab, Teva and Sandoz recently exited part of their generics businesses. Indian generics