analysts said for the September quarter, while the volumes fell 6.5 per cent YoY, price growth came in at 4.6 per cent. Kunal Randeria, analyst with Edelweiss Securities, also noted in a recent note that the quarter margins would be driven by pricing growth. “While volume growth faces challenges, mid-single digit price growth is expected to aid margins,” he noted.
Companies are allowed to take an annual price hike of up to 10 per cent on non-scheduled drugs (those outside the purview of the National List of Essential Medicines or NLEM). For those in the NLEM, the price hike is determined by the wholesale price index.
“Most firms are, however, unable to pass on this 10 per cent annual price hike allowed as competition itself keeps prices in check. Unless someone has a marquee brand or a very well entrenched brand in the market, no one is usually able to pass on the hike,” said an industry veteran, who headed a multinational giant earlier.
analysts also said that while price growth for non-NLEM products stood at 4.8 per cent YoY, NLEM products saw a price rise of 3.6 per cent. Companies such as Glenmark, Ajanta Pharma, and Cipla were among those that witnessed high growth.
Glenmark has been riding on the demand for its oral anti-viral favipiravir. Glenmark has thus bucked another industry trend — the acute therapy grew faster than chronic medicines — thanks to favipiravir.
Other firms have seen their acute therapy sales lag behind chronic drugs. Chronic medicines like cardio-diabetic drugs, among others, have been contributing to the domestic market growth as new prescriptions dried out. The country’s largest drugmaker Sun Pharma, for example, saw a 1.8 per cent dip in September sales, dragged down by therapies like anti-infectives (-13.5 per cent). Anti-infectives are acute therapy drugs taken to fight an infection.