The disruptive lockdown and lower prescription generation can lead to the Indian Pharma market growth softening in the short-term. Past experiences like GST-related disruptions have shown that in medium to long-term, the market will offer sufficient headroom to grow, for both generics and branded players. Delay in the launch and ramp-up of new products given limited interaction between the sales force and healthcare professionals remains a key near term risk.

This situation can also offer a significant opportunity for companies involved with exports of Pharma products. Reports indicate that there will be a shortage of generic drugs in many developed and underdeveloped markets. Indian Pharma, with its increase in filings and improvement in regulatory compliance, should benefit from product-specific opportunities, which could result in higher realisations.

Opportunities for small to medium-sized pharma companies

The pharma industry should continue to grow double-digit for the year. The impact of the current COVID-related disruption on more significant Indian players is expected to be relatively limited. We are also seeing that the API supplies from China have gradually resumed. The Drug Controller General of India has granted permission for import of drug with residual shelf life less than 60% allowed under Special Condition. The industry has requested DCG(I) to consider for 6-month extension in validity of recently expired and near expiry RC & Form-10 for APIs and Formulations.

Manufacturing facilities are performing at < 60% capacity due to lower workforce, and the disruptions in the movement of raw materials within the country. Estimated 50% of the plants are unable to supply to stockists and are facing difficulty in transportation. Manufacturing hubs in states like HP, UK and Sikkim are expected to recover faster as compared to states like Maharashtra, Gujarat and Andhra Pradesh, and Telengana due to lower disease burden.

Companies should plan for increased focus and investments in states which are open and have relatively low COVID-19 cases. This is the time to explore new opportunities.

High COVID- 19 burden states like Maharashrta, Gujrat, Rajasthan, Madhya Pradesh, Uttar Pradesh, Telengana and Andhra Pradesh are expected to contribute up to 50% of the total Indian Pharma market and they may open at a up slower rate than other states. Companies should plan for increased focus and investments in states which are open and have relatively low COVID-19 cases. This is the time to explore new opportunities.

Companies should consider using this time to create robust plans for the launch of new products as the markets open. They should also focus on areas of Respiratory Acute, Immune boosting agents, Vaccines, and Cardiac products among others.

Sales teams across the industry have been working remotely and the supply chains and marketing efforts have also been impacted. This offers an opportunity for local players to gain market share.

As the markets open post COVID-19, we will witness a significant rise in demand of medicines due to lower inventories with distributors and retailers. Companies will need to come out with innovative solutions and focus on early supplies to liquidate the existing stocks. Small companies can use this to their advantage through efficiently supplying products locally, in peripheral towns and rural markets to bridge this gap till larger players become active.

Larger generic exporters are expected to see a strong volume growth with patients filling prescriptions to cover longer periods of time.

In the post COVID 19 market, demand is expected to grow in various regulated and unregulated markets as past orders may not have been executed.  With hospitals and distributors facing the problem of lower inventory, we expect that opportunities will open up to bag these orders with better realisation. 

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