In a move that could boost the growth of the packaging industry, the National Pharmaceutical Pricing Authority (NPPA) is believed to be contemplating over the possibility of raising the pharma companies margins in packaging cost to help them cope up with the rising expenditure.
This will come as a huge relief for the packaging sector which is slowly but steadily making their strong presence felt in the country by becoming an integral part of the pharma industry. The other key factors that will further boost the scope and demand for the industry is the recent spate of anti counterfeit measures taken by pharma companies and the government to fight this menace.
It is understood that the production capacities of large scale manufacturers in the packaging sector contribute to nearly 50 per cent of the entire market, while the rest of the packaging is outsourced. At present, the sector is segregated into different segment based on the requirement of the industry namely, blister packaging, small scale blister packaging, de-blistering machines and leak testing machinery etc.
Experts predict that with all the regulatory requirements and compliance factor from within the country and from the overseas market to fight counterfeiting, pharma packaging sector is sure to expencie a great boom in the coming years. Especially, since all these regulatory requirements would mean more growth opportunities and rising margin for packaging units.
A recent report suggest that the Gujarat-based pharma packaging units and packaging machinery units have been clocking a 15 to 18 per cent compounded annual growth rate. Many companies across the country are said to e basking under this positive trend as many stress that their business have grown multiple times in the past few years.
It is understood that, packaging and conversion cost account for nearly one-third of the price that consumers have to pay for a medicine. Industry experts point out that if the NPPA allows more margin to the drugmakers in packaging cost, it would definitely boost the industry at large. A recent PlastIndia report outlines that currently the share of pharma packaging in the Rs 1,25,000 crore polymer processing industry is around 7 per cent, and therefore, there is huge potential for growth.