Unichem Labs Chairman says pharma sector recovery may get delayed but not derailed
New Delhi: The outlook for the pharma industry is one of cautious optimism and recovery might get delayed but not derailed, according to Unichem Laboratories Ltd Chairman and MD Prakash A Mody. In his message to shareholders in the company annual report for 2021-22, Mody said, "several multi billion dollar drugs" going off patent over the next few years and increasing use of generic medicines in developed markets to cut healthcare costs will provide attractive growth opportunities for generics manufacturers.
"Although the future is full of uncertainty and challenges, the outlook is one of cautious optimism. Recovery might get 'delayed' but not 'derailed'. However, companies will have to remain on guard concerning the geopolitical situation and the pandemic-related uncertainties," he said.
The recent period has been relentless with the global pandemic, military conflict, supply chain shortages and businesses had to cope with this unprecedented sequence of events with speed and agility, he added.
"While the world was recovering post pandemic, inflation and supply chain disruption had offset the buoyancy in the recovery of consumption across the globe," Mody said.
On the opportunities in the future, he said, "several multi billion-dollar drugs going off patent over the next few years and increasing use of pharmaceutical generics in developed markets to reduce healthcare cost will provide attractive growth opportunities to generics manufacturers and thus, Indian pharmaceutical industry is poised for an accelerate growth in the coming years."
Unichem said global peace has never faced challenges of this significance since World War II. Economic recovery will be severely hampered across the world. This uncertainty poses a downside risk to growth.
The near-term growth is certainly going to get impacted due to war in Europe, which has gone longer than initially expected, posing new challenges - pushing fuel, commodity prices, escalating logistics costs and finally weakening the global demand, the company said.
"The Indian pharmaceutical industry fears disruption in API (Active Pharmaceutical Ingredient) and intermediates supply chains as new Covid lockdown in China may have cascading effects on the cargo supplies," it added.
India imports 70 per cent of its requirements of raw materials or intermediates from China which may foresee supply constraints if the lockdown continues and have an impact on exports, Unichem said in the annual report.
On the other hand, the company said as the world returns to normal after the pandemic, consumer confidence is gradually returning and the aggregate demand conditions point towards a sustained recovery.
However, the growth could be marred by higher prices due to the geopolitical situation, impacting global shortages due to output losses and export restrictions, forcing intermittent supply-side constraints which could sustain higher logistics costs, the company added.
Unichem highlighted capability, technology, digitisation, demographics, lifestyle patterns, communicable and non-communicable diseases as the focus areas for the future healthcare solutions.
"The future roadmap for the sector promises to center on sustainability, R&D, innovation, upskilling and reskilling. The outlook is one of cautious optimism and it is believed that recovery may be delayed but not derailed," it said.
Apart from ageing and rising population, access to quality healthcare worldwide will drive the pharma industry, the company said, adding, "the rise in drug approvals by the regulatory bodies as we return to normal after pandemic is expected to fuel pharmaceuticals manufacturing activities".
Unichem said it is "well positioned to grow its business on the back of successful international accreditations at its plants and increased number of regulatory filings".
Read also: Unichem Laboratories gets USFDA approval for its Nebivolol Tablets
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