- Home
- Medical news & Guidelines
- Anesthesiology
- Cardiology and CTVS
- Critical Care
- Dentistry
- Dermatology
- Diabetes and Endocrinology
- ENT
- Gastroenterology
- Medicine
- Nephrology
- Neurology
- Obstretics-Gynaecology
- Oncology
- Ophthalmology
- Orthopaedics
- Pediatrics-Neonatology
- Psychiatry
- Pulmonology
- Radiology
- Surgery
- Urology
- Laboratory Medicine
- Diet
- Nursing
- Paramedical
- Physiotherapy
- Health news
- Fact Check
- Bone Health Fact Check
- Brain Health Fact Check
- Cancer Related Fact Check
- Child Care Fact Check
- Dental and oral health fact check
- Diabetes and metabolic health fact check
- Diet and Nutrition Fact Check
- Eye and ENT Care Fact Check
- Fitness fact check
- Gut health fact check
- Heart health fact check
- Kidney health fact check
- Medical education fact check
- Men's health fact check
- Respiratory fact check
- Skin and hair care fact check
- Vaccine and Immunization fact check
- Women's health fact check
- AYUSH
- State News
- Andaman and Nicobar Islands
- Andhra Pradesh
- Arunachal Pradesh
- Assam
- Bihar
- Chandigarh
- Chattisgarh
- Dadra and Nagar Haveli
- Daman and Diu
- Delhi
- Goa
- Gujarat
- Haryana
- Himachal Pradesh
- Jammu & Kashmir
- Jharkhand
- Karnataka
- Kerala
- Ladakh
- Lakshadweep
- Madhya Pradesh
- Maharashtra
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Odisha
- Puducherry
- Punjab
- Rajasthan
- Sikkim
- Tamil Nadu
- Telangana
- Tripura
- Uttar Pradesh
- Uttrakhand
- West Bengal
- Medical Education
- Industry
Continued pricing pressures in US, European Markets to affect profit margins of Indian pharma firms: Ratings agency ICRA
ICRA said most major Indian pharmaceutical companies continue to focus on emerging markets to fuel their growth, given that they continue to face pricing pressure in the US and the European markets.
New Delhi: Continued pricing pressures in the US and European markets coupled with regulatory overhang and cost inflation will affect profit margins of major Indian pharmaceutical firms, ratings agency ICRA said on Thursday.
The revenues for a sample set of 16 Indian pharmaceutical firms, including the likes of Wockhardt, Torrent Pharmaceuticals, Pfizer, Abbott India, Cipla, Lupin, Sun Pharmaceuticals and Dr Reddy's, are expected to grow by 4-6 percent in FY2023, marginally lower than the growth of 7.7 percent in FY2022, ICRA said in a statement.
However, for FY2024, ICRA said it expects the sample set revenues to grow by 6-8 percent primarily driven by the domestic and emerging markets.
The ratings agency said while revenues for these companies in FY23 will be supported by 5-7 percent year-on-year growth in the domestic market and 4-5 percent in the US business, revenues from the European market are expected to contract marginally, given the ongoing macroeconomic challenges and the large base of the previous fiscal which was supported by vaccine sales.
Yet, ICRA said, "Continued pricing pressures in the US and European markets and cost inflation (is) likely to result in 50-100 bps contraction in operating profit margin for ICRA's sample set in FY2023".
Revenues of ICRA's sample set from Europe continue to witness headwinds such as muted demand, the depreciation of the euro against the rupee, and pricing pressures due to increasing competition, ICRA Assistant Vice President & Sector Head Mythri Macherla said.
Further, she said, "Some companies are thus exiting non-profitable markets and/or products to protect their margins as the ongoing inflationary pressures are also impacting the cost of imports from Europe."
The market conditions in Europe are expected to remain challenging, given the ongoing macroeconomic issues, even as the same is expected to be mitigated for some companies to a certain extent by expansion in product offerings and market share gains in existing products, Macherla said.
As for the US market, the ratings agency said in line with the trends in the recent past, mid-to-high single digit pricing pressure is expected to continue over the near term for generics, with some normalisation expected only after a few quarters.
On the recent pick-up in inspections by the US Food & Drug Administration (USFDA), the rating agency's Assistant Vice President & Sector Head Deepak Jotwani said, "With the USFDA re-commencing physical inspections of manufacturing facilities and some companies receiving form 483s and warning letters, regulatory risks remain a key monitorable."
Any adverse outcome in the form of warning letters or import alerts for key facilities could impact the companies' business prospects, he added.
ICRA said most major Indian pharmaceutical companies continue to focus on emerging markets to fuel their growth, given that they continue to face pricing pressure in the US and the European markets.
"The growth in emerging markets also continues to be driven by new product launches, strong demand, and depreciation of the rupee against certain currencies," it added.
Ruchika Sharma joined Medical Dialogue as an Correspondent for the Business Section in 2019. She covers all the updates in the Pharmaceutical field, Policy, Insurance, Business Healthcare, Medical News, Health News, Pharma News, Healthcare and Investment. She has completed her B.Com from Delhi University and then pursued postgraduation in M.Com. She can be contacted at editorial@medicaldialogues.in Contact no. 011-43720751