Indian pharma industry and Ayurveda units have taken a toll with the economic  slowdown. Austerity measures are being adopted on account of lingering debt crisis, slower global growth and high cost of raw materials. All these negative factors have seriously impacted the company balance sheets.

The downturn has affected developed world and India too suffered a collateral damage thereby resulting in reduced growth potential. The misdirected pharma policies, hindrances through monotonous procedures have affected the export performance of small and medium enterprises. Added to these are the new regulations imposed by European Union (EU) to  implement its 'Directive on Falsified Medicines' adding delay thereby the chances of losing export orders are high, said SG Biligiri, president, Karnataka Pharmaceutical & Drug Manufacturers Association (KDPMA) and technical director, Juggat Pharma.

Between 2008 end and 2012 top-selling drugs lost patents causing a loss over $100 billion in sales. The year 2013 is crucial for pharma majors in the US and European Union when revenues losses of $29 billion are seen due to further patent expiry, points out Deloitte in its report on Global lifesciences outlook.

“Globally blockbusters are being replaced by targeted therapies, creating companies to formulate and bring to market new products to fill the pipeline and generate related  revenues. Therefore there is a paradigm shift in the nature and composition of the industry. Indian pharma too now needs to restructure its business and capitalize on its inherent strengths. But pharma industry in the country is nowhere close to an original drug discovery, pointed out the members of KDPMA.

Indian pharma growth prospects revolve around generics and biosimilars, drug manufacturing capability, strengthening of Indian rupee, availability of sound skill base and global distribution reach. But the prevailing unrelenting inflation, massive power crisis, poor capital inflows, rising loans particularly short-terms credits, stringent global and Indian regulations will see the small and unwieldy medium players grapple in uncertainty, stated Jatish Seth, vice chairman, Confederation of Indian Pharmaceutical Industry (CIPI), member, KDPMA and director, Srushti Pharmaceuticals.

Further, despite allowing foreign direct investment (FDI), setting up of the Competition Commission of India (CCI) and the finalisation of the land acquisition draft bill, new project initiatives have not taken off and the existing ones are in phases of distress with cost and time overruns, added Jatish.

Even the Ayurveda sector portrays a gloomy picture. “The slowdown has been all pervasive. Ayurveda products are impacted by the growing raw material costs and their acute shortages. The demand and supply ratio is skewed as cultivation has declined. There are serious gaps in government schemes to encourage cultivation of medicinal plants. In addition excise duty on classical formulations and regulatory uncertainties have led the sector to be cautious as growth is shrinking at a faster pace, said Dr Venkatesh, AyurPharma Consultant.

The only way to survive, therefore,would be to restructure business and opt for mergers or acquisitions. Industry should also sharpen its focus on global market opportunity and not just go for generics by biosimilars, said Gurudatta GG, chief executive officer, Estima Pharma Solutions.