The Indian Pharma market (IPM) achieved 10.4% growth in June 2014 and 7.9% growth in Q1FY15. While the Pharma market achieved double‐digit growth for the first time in the last 12 months, the government’s addition of 49 molecules (108 formulations) in the price ceiling list will reduce growth prospects in FY15, according to Prabhudas Lilladher (PL).
The broking house, further said, ''The government aims at capping 25% premium to SAP (simple average price) for the 108 formulations which are likely to reduce independence of individual companies to determine selling price of non‐NLEM (non‐scheduled) drugs.''
''We expected increasing volume growth to be aided by increasing price of 348 NLEM drugs (due to provision of annual price hike with a cap of WPI rate) from July 2014 onwards. The growth expectation in domestic formulations, however, would be limited post price cap in 108 formulations in major therapeutic areas (Cardiac and Anti‐diabetic),'' it added.
Key takeaways - Company - wise growth
Sun Pharma's monthly sales maintained mid-teen growth at 16% in June 2014. Sun's growth was 15% in May 2014, MAT growth was 15.8%, while average growth in new price regime since July 2013 was 17%.
Cipla's sales growth increased by 490bps MoM to 11.7% in June 2014, mainly on the back of growth in anti-infective sales as growth in respiratory segment continued to decline in June 2014.
Ranbaxy and Glaxo continued to be impacted by new NLEM regime (at varying degree) in June 2014. Glaxo's sales declined by 7%, while Ranbaxy's sales increased by 4.1% (after six consecutive months of decline) in June 2014. Growth in anti-infective and GI segment helped sales growth of Ranbaxy in June 2014.
Dr Reddy's growth followed management guidance for FY15 as the company increased growth since April 2014. The company grew 17% in June vis-a-vis growth of 5% in April and 9% in May 2014.
Lupin's growth of 20% in June 2014 is above management guidance of 15% growth in domestic formulations for FY15. Glenmark’s sales increased further to 17% in June 2014 after monthly sales growth dipped by 11% in March 2014.
IPCA maintained strong sales growth at 28%, while Torrent’s growth decreased to 12% due to base affect post incorporation of Elder Pharma sales. IPCA's strong growth in June 2014 despite weak growth (5%) in Anti-malarial drugs implied quality growth in high margin products.
J&J grew highest (12.3%) among MNC Pharma companies in June 2014, followed by Merck Kga (E-Merck) at 12.2 and MSD at 10.5%.
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