Super-normal growth of Indian pharma market slated to lose momentum

ET INTELLIGENCE GROUP: The latest guidelines on Covid treatment released by the health ministry have made sweeping changes by excluding drugs such as ivermectin, azithromycin, doxycycline, zinc tablets, favipiravir and plasma therapy from the list of approved treatments for Covid patients and recommending extreme caution for the emergency use of remdesivir and tocilizumab. The guidelines have dropped all medicines, except antipyretic and antitussive for asymptomatic and mild cases of Covid.

The guidelines, along with the abatement of the second wave of the pandemic, are likely to have an impact on the extraordinary growth posted by the Indian pharma market. Thanks to a low base and brisk sales of Covid-related medication, the market grew 51.5% and 47.8% for the months of April and May, respectively. The growth has been skewed towards anti-infectives, respiratory, vitamins and analgesics—acute therapy drugs that have come to be liberally prescribed to the Covid patients.

Among the listed companies, Cipla and

have been the biggest beneficiaries—significantly outperforming the market for the year ended May 2021—due to higher sales of Covid-related products and sustained performance of the chronic therapies. However, with a marked decline in Covid cases and Covid-related medication, these companies are slated to face slowdown in their domestic drug sales on a sequential basis, an aspect likely to be reflected in their September quarter performance.

As the trend in drug sales normalises to the pre-pandemic levels over the next few months, the Indian pharma market is likely to revert to an annual growth of around 10% that includes 4-5% price growth. Sales of antipyretic and analgesics may nevertheless continue to remain firm in the near term since they are often prescribed for use in case of post-vaccination discomfort.