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Multinational pharma firms’ share in the domestic pharma market is expected to go up to 20 per cent in the current fiscal, and further up to 21 per cent in FY16, claims a recent report by Centrum Broking.
The report titled MNC Pharma Brands-Sector Update, says that the share of MNCs is expected to go up in the domestic market due to the price increase of around 6.4 per cent in price controlled products in April this year, as well as volume growth. “The eight MNC pharma companies generated 19 per cent revenues in the domestic market in Q1FY15. These companies have 74 brands (25 per cent of total) among the top 300 brands indicating strong brand building. These brands have strong recall in the doctor’s chamber,” the report says.
As per IMS MAT April-June2014 data, the eight MNC pharma companies generated 19 per cent of domestic revenues. The report further claims that a shift to major MNC brands is likely after price cuts.
“The 74 major brands of eightMNC pharma companies accounted for 47 per cent of their revenues. Novartis India’s seven major brands contributed around 66 per cent of its revenues and hence the company has high dependence on its brands. We expect these brands to drive future growth despite price control due to their quality and reliability,” the Centrum report says adding that as some of these brands are already well-entrenched in the domestic market (30-40 years old brands), with the fall in prices after the Drug Price Control Order 2013, there would be shift from competing brands to MNC brands, thereby gaining volumes.
Add to this the upward revision of drug prices. For price controlled products, pharma companies have increased prices by 6.3 per cent based on the Wholesale Price Index (WPI) in April 2014. Moreover, 108 brands that came under price control in July 2014 will be eligible for up to 10 per cent increase in price per annum in July 2015.
Good volume growth for products from these brands which will partly offset the effect of price reduction. According to Centrum the major beneficiaries would be GlaxoSmithKline, Pfizer, Novartis India, Sanofi India and Wyeth. Pfizer is likely to benefit from the merger with Wyeth as the merged company would have 14 brands in the top 300 brands.
“Their key brands Dolonex, Minpress XL, Wysolone, Prevenar 13, Ativan and Corex Dx have shown over 17 per cent growth and are likely to drive future growth,” the report adds.
