The significance of India’s pharmaceuticals sector can be gauged from the fact that in FY16, India’s exports of pharmaceutical products stood at USD 16.9 billion, which was about 5 per cent of the aggregate value of India’s total exports during the year. This was revealed by Dun & Bradstreet, the world’s leading provider of business information, knowledge and insight while launching its first edition of India’s Leading Pharmaceutical Companies.
The event was addressed by eminent industry leaders and policymakers including Faggan Singh Kulaste, minister of state for health & family Welfare and Sudhansh Pant, joint secretary, Department of Pharmaceuticals, ministry of chemicals & fertilizers.
Delivering the welcome address Kaushal Sampat, managing director - India, Dun & Bradstreet said,“India’s pharmaceutical market size stands at around Rs. 1.7 trillion. Pharmaceutical exports stand at around US$ 17 billion, and it contributes to about 20 per cent of the global exports in generics. India is also among the major exporters of Active Pharmaceutical Ingredients (APIs)/bulk drugs. Today, India is making a huge difference in providing affordable healthcare and in developing cures and treatments for life-threatening diseases like cancer, cardiovascular diseases, diabetes and other lifestyle diseases, among others. This is a testament to the global leadership that the Indian pharmaceuticals industry has achieved”.
“The Indian pharmaceuticals sector is playing a delicate balancing act, trying their best to stay profitable while not compromising on R&D and innovation. Many of the pharmaceutical companies are willing to take a hit on their profits to pursue R&D and come up with new cures, new treatments and new innovations. No doubt, manufacturing of pharmaceuticals is a serious business, but it is commendable that Indian pharmaceutical companies are focusing on making their products not only effective, but also affordable for the masses”, Kaushal further added.
Key highlights of India’s Leading Pharmaceutical Companies based on FY15 and FY16 financial performance are that the aggregate value of India’s pharmaceuticals exports stood at USD 16.9 billion in FY16, which was 9.4 per cent higher than the USD 15.4 billion exported in the preceding year. The North American region accounted for more than one-thirds of India’s pharmaceutical exports in FY16, followed by Africa (20 per cent) and the European Union (15 per cent). A whopping 55 per cent of India’s pharmaceutical exports are to highly regulated markets like the USA and UK.
Key highlights for 59 companies based on FY16 financial performance are that the aggregate total income grew by a healthy 11.5 per cent as compared to a year ago - this is attributed to growing demand for pharmaceutical products, both within India and abroad. The aggregate value of export of goods reflected a 17 per cent growth in FY16, which is much faster than the 9.4 per cent growth in India’s overall pharmaceutical exports during the year. The aggregate net profit rose by a sharp 41.3 per cent as compared to FY15 – this growth is attributed to the robust growth in exports, which are profitable for the sector, and a much slower rise in the sector’s largest expense head, ‘raw material expenses’.
In FY16, raw material expenses rose by merely 3.1 per cent; the prices of bulk chemicals, which are used as starting materials for most companies in the sector, have remained low due to cheap imports from China and Indian suppliers of APIs being forced to keep their prices low.
The R&D spending rose by a robust 23.5 per cent as compared to FY15; R&D spending as a percentage of total income expanded from 5.6 per cent in FY15 to 6.2 per cent in FY16, reflecting the increasing focus on R&D activity and innovation.