Indian pharma players shifting to specialty business due to pricing pressure in US: Nirmal Bang

Indian pharma players have been shifting to specialty business due to excessive pricing pressure in the US, said Nirmal Bang, one of the leading stock broking companies in India, in its report.

"The Indian pharma industry’s strongest market that drives half the revenues is the United States. The generic players, for years, have been relying on the US market for increased sales. However, they have been shifting to specialty business due to excessive pricing pressure in the US," said the report.

Moreover, pharma biggies are finally opening up in China to carve a niche in complex generics. Players that are aggressively looking into the opportunity are Dr Reddy’s Laboratories, Sun Pharmaceuticals and Aurobindo Pharma, said Nirmal Bang in its report. "With Indian players moving to China, US market will see generic prices moving up," the report said.

In terms of scope for opportunities, Bang said that the China market is about 4x of Indian market size. A large share of prescriptions in China are written in favour of MNC brands, which are priced multi-fold higher than generics. For example, Lipitor, which is no longer patent-protected, generates sales of US$1.2 billion in China.

Indian Players Filings In China

While the China market stands as a big opportunity for India, there will be a competition between the two, but unlike Indian counterparts, Chinese are not focused on generics, the brokerage said, adding that the Chinese firms are aggressively investing in R&D efforts but have limited experience with regard to developing copy-cats of complex generics.

The country has presented a list of 34 drugs inviting generics versions where Indian players can participate and generate revenues, the report mentioned.

Pharma Companies Opportunity In China