Pharmaceutical Exports Slow Down Due To Approval Delays And Recalls

5-Jun-2013

HYDERABAD: India's pharmaceutical exports grew at less than half the pace it did last year, hurt by delays in drug approvals and products recalls in some of its key markets. In dollar terms, pharmaceutical exports rose 9.9% in fiscal 2013, compared with 23% a year earlier. But a weaker Indian currency — which fell about 18% over the last year — meant that pharma exports grew 25% in rupee terms.



This is the first time in the recent years that the Indian pharma exports saw single digit growth in dollar terms. "Europe has faced recession with two countries — Spain and Italy — suffering the most. The United States and Europe account for nearly half of Indian pharma exports and growth in exports to both these regions saw a significant decline," said PV Appaji, Director-General, Pharmaceutical Exports Promotion Council (Pharmexcil). Pharmexcil now expects the sector to grow at 17% for the current fiscal, said Appaji. The commerce ministry, which had set a target of $25-billion (Rs 1,41,750 crore) worth of exports by March 2014, has shifted the deadline to March 2016, he added.



Pharmaceutical exports from the country during 2012-13 stood at $14.59 billion (Rs 79,500 crore), up from $13.26 billion (Rs 63,500 crore) the previous year.



"Most Indian pharmaceutical companies were affected by macroeconomic factors like high interest rates and inflation. However, the rupee weakening against most major global currencies has come as a major help to the net exporting firms," said an analyst with a Mumbai-based brokerage who did not wish to be identified.



While exports to North America grew 13.44% to $4 billion (about Rs 22,000 crore) , those to Europe rose marginally to $2.63 billion. A year-ago, exports to North America and Europe had grown 33% and 30%, respectively. Natco Pharma's Chief Financial Officer, P Bhaskara Narayana, and Angel Broking's pharma analyst, Sarabjit Kaur Nangra, attributed the slowdown in growth to delayed approvals from regulators and drug recalls.



Ranbaxy, Dr Reddy's and GlenmarkBSE 0.51 % are among the top Indian companies that recalled their products during the last fiscal because of various issues. RanbaxyBSE 1.30 % recalled its generic Lipitor, Dr Reddy's its anti-depression drug Citalopram and Glenmark recalled Montelukast sodium tablets. "Large-cap Indian pharma companies like Dr Reddy's have performed well in the US market last fiscal and many big companies have given good guidance of 20% for the current fiscal," said Nangra. "The problem in growth is mostly being faced by the small and medium pharma companies."

Source:-economictimes.indiatimes.com