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Pharma FY01: Domestic vs MNCís

May 16, 2001

How did the pharma majors perform against each other in FY01? We present a brief comparison between the top 5 domestic vs multinational pharma companies.

Domestic Pharma Growth in Sales (%) MNC Pharma Growth in Sales (%)
Ranbaxy 4.50% Glaxo Wellcome 5.50%
Cipla 37.90% Hoechst Marion Roussel 1.40%
Sun Pharma 28.70% Pfizer 12.00%
Wockhardt -2.90% Knoll 14.80%
Alembic 9.50% SmithKline Beecham -2.10%
Consolidated growth 13.40% 5.60%
(Note: Top 5 companies have been on the basis of un-audited results declared)

Net sales of Top 5 domestic pharma companies has improved by more than 13% (as against industry average of 9-10%). MNC pharma companies under-performed the domestic peers, as consolidated sales grew by mere 5.6%. This could be attributed to obvious reasons viz. relatively older product portfolio and higher DPCO coverage. While MNCís continued to shy away from launching new products, domestic companies were aggressive in product launches. For example Cipla alone launched more than 100 products during the year across various therapeutic segments. It is estimated that MNCís have contributed only 6-7% of total new product launches during FY01. Domestic companies strategy of identifying and exploring new niche therapeutic segments to offer superior products at competitive prices seems to be paying off.

However, operating margins of Multinational pharma companies inched up further mainly due to relaxation in DPCO during the year. Coming to the operations, most of the MNC pharma companies rationalized their field forces, sold off their real estate and consolidated operations in India. Glaxo, for instance sold off its tail-end brands, as did Hoechst. Indian pharma companies, on the contrary expanded their R&D set ups, filed abbreviated new drug applications (ANDA) to cater to the generic market overseas and bought brands from smaller companies in India.

The multinationals seem quite sure not to launch their blockbuster products in India till the product patent becomes a reality. The trigger for them in the near term seems to be further relaxation of DPCO as they have strong brands in their stable. On the other hand, Indian companies are gearing up to meet the challenge post product patent regime. Who wins the race post 2005, is anybodyís guess right now, but one thing is certain, Indian pharma scene is all set for a battle royal.

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