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Finding New Markets To Grow
India’s pharma exports are shrinking. Focusing on smaller, emerging markets can reverse the trend
Photo Credit : Shutterstock
Unfortunately for India, the existing market for copycat drugs — our forte — is drying up. To shore up its pharma exports, the government is encouraging players to hunt for new markets alongside innovating complex generics for the country’s largest drug export market, the United States.
The government feels it will do good to Indian pharma exporters to shift their focus towards smaller, emerging markets. “Commerce and industry minister Nirmala Sitharaman has asked the ministry’s export regulation bodies to tell exporters to look at diversification plans into young markets,” says a senior commerce ministry official who requested to remain anonymous. According to the source, “India’s next target is Myanmar, Peru, Ecuador, Columbia, Turkey and Venezuela. Myanmar has approached the Indian market. The opportunity looks very promising. It wants to purchase generic drugs for its government hospitals.”
Myanmar’s proposal to buy generic drugs has attracted interest from over 60 Indian companies.Pharmaceutical exports to Myanmar between April and February stood at $162 million, while exports to the country in 2015-16 were at $152 million.
According to the latest data by Pharmaceutical Exports Promotion Council (Pharmexcil), the drug export arm under the ministry of commerce and industry, pharmaceutical exports decreased marginally to an estimated $16.4 billion during the financial year ended 31 March, 2017. During the year, pharma exports, including bulk drugs, were down 4.7 per cent year on year, and the sector’s net sales grew at its slowest in about a decade. “There was no growth in pharma exports during 2016-17 compared to exports worth $16.89 billion during 2015-16,” says Uday Bhaskar, director-general of Pharmexcil.
The reason he offers are “price erosion and absence of blockbuster drugs, among others.”
Pharma exports — once seen as the next big thing for India after the successful stint of the country’s information technology (IT) industry — have not been up to the mark. In FY17, IT services exports, at $160 billion, were nearly 10 times of pharma exports, and nearly 60 per cent of the country’s merchandise (goods) exports, as per the industry estimates. During the same period, India’s pharma exports accounted for 5.8 per cent of India’s total merchandise exports, down from 6.4 per cent in FY16.
All this reflects in the financial performance of listed pharma companies, which are facing rough weather after nearly a decade of high double-digit growth. More than ever before, looking for new, better avenues, is the need of the hour.