US opportunity beckons for Indian Pharma - Chart Of The Day 12 September 2014 - Equitymaster
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US opportunity beckons for Indian Pharma
Sep 12, 2014


The next few years present a huge opportunity for Indian pharma companies in terms of drugs going off patent in the US market. Patents of drugs worth around US$ 92 bn in sales are expected to expire in the period 2014-16. This is much higher than US$ 65 bn worth of drugs that had gone off patent in 2010-12. Many of these opportunities, especially in 2014, are blockbuster drugs. These are essentially drugs whose annual sales exceed US$ 1 bn. However, while the opportunities are huge there are also challenges.

The US generics market is highly competitive. Especially for blockbuster drugs, because so many players vie for a share of the drug's pie, prices erode considerably. And so the revenue and profit potential also dramatically reduces. That is why quite a few of the big players such as Sun Pharma, Dr.Reddy's and Lupin among others are focusing on building a niche portfolio. This means that they are focusing on drugs which are not easy to manufacture and hence the competition and thereby price erosion is considerably lesser. The other bigger challenge for Indian Pharma is the US FDA. Indeed, the US regulator has become very stringent in terms of maintaining quality at plants. And most domestic pharma companies have been pulled up for not complying with these standards. That is why even if the opportunity exists, it will not amount to much if the standards of the US FDA are not met.

Data Source: Mint

This Chart Of The Day was published in The 5 Minute WrapUp - Are We On The Threshold Of A Mega Returns Opportunity?

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1 Responses to "US opportunity beckons for Indian Pharma"

amarish shah

Sep 12, 2014

still much cheap share are available in pharam.even us will not support us india market is big.
one example i am giving .if there are 5 cr diabetic patients and they pays only rs. 10.00 per day. the total volume of year of diabetic drugs will be rs.18000.00 cr .
image of others.

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