The domestic market has fared better. From 15 per cent revenue growth in 2011-12 it has slowed to nine per cent in 2016-17. This, however, is on a higher base; from Rs 70,500 crore in March 2013, the Indian pharmaceuticals market has swelled to Rs 1.14 lakh crore in March 2017.
Gaurav Jain, vice-president and co-head, corporate sector ratings, ICRA, said, "Given the commitment that big pharma has to complex and niche product filings, its R&D investments will continue to rise. This will also ensure growth in revenue and profitability in the medium term."
The base basket of products for pharmaceutical companies
is facing pricing pressure. Jain said in the past year pricing pressure on the base basket had increased from five-eight per cent to the low double-digits.
Indian pharmaceutical companies produce roughly 40 per cent of the generic drugs sold in the US. The US generic drug market is expected to reach $71.9 billion by 2018.
The number of abbreviated new drug applications (ANDAs) has increased significantly with the growth in R&D expenditure. ICRA data showed that from 1,961 cumulative ANDAs in 2014-15, the number of cumulative filings has increased to 2,446 in 2016-17.
Approvals, too, have been growing. The US Food and Drug Administration website states Indian companies, including their US-based subsidiaries, received 141 drug approvals between January and June. This is higher than the 94 approvals received during the same period last year. In comparison, the growth rate in drug approvals for non-Indian companies is 15.27 per cent.