X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Pharma: Life styles matter - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Pharma: Life styles matter

Sep 6, 2004

Lifestyle drugs have taken the centre stage in the last few years. To put things in perspective, for the first time in 2003, CVS (cardiovascular) drugs overtook anti-ulcerants as the largest therapeutic class worldwide. But India is yet to catch up! Lifestyle drugs are the basically medicines used to cure diseases that are linked to stress, urbanization, changing diet pattern and lifestyle of high-income level population. Major drugs in this segment are anti-diabetes drugs, cardiovascular drugs, gentio-urinary and sex hormones drugs, CNS drugs, anti-depressants and psychiatry.

India continues to be a market where anti-infectives continue to lead the therapeutic drug class with about 16% market share. Having said that, lifestyle drugs have been the key growth driver for the domestic pharma industry and this is the reason Indian companies have started focusing on lifestyle drugs with slew of launches in the last few months.

Among the various therapeutic segments, respiratory and anti-infectives (non lifestyle drugs) fuelling growth till FY02. But, as is evident from the table below, there has been a slowdown in these segments. At the same time, impressive growth in the life style drug segment has brought a new lease of life. This can be attributed to the changing lifestyle and increasing urbanization in India. The following table shows the market growth rates for FY04 and FY03.

Therapeutic Segments Growth:
Therapeutic Segment Market Growth Rate FY03 Market Growth Rate FY04
Respiratory 5.6% 9.0%
Anti-Infectives -0.2% 5.0%
Lifestyle Drugs:
Anti-Diabetics 20.3% 11.6%
Cardio Vascular Segments 12.4% 17.2%
CNS 13.4% 8.9%

As said earlier, internationally, lifestyle drugs are major contributor to the pharma industry and India is also moving in the same direction. Also, the fact that the higher-income group drives the demand for lifestyle drugs, it is not price sensitive in nature. Thus, a major portion of the growth of these drugs is coming from value rather than volume. Consequently, margins are also high.

Rising demand and relatively better margins have resulted in Indian companies concentrating more on lifestyle drugs in the recent past. For instance, in case of Nicholas Piramal, the share of lifestyle drugs in its portfolio increased by about 6% in the last two years (24% in FY02 to 29% in FY04). In case of Sun Pharma, the three segments of lifestyle drugs accounted for 61% of its domestic prescription sales in FY04.

Going forward, we may see that the contribution from lifestyle drugs for many companies growing at a faster rate than traditional therapeutic segments. Companies like Cipla and Ranbaxy, who have been big players the traditional segments, have launched several products in the lifestyle category in recent times. While we expect higher benefits from such an industry transition in the medium-term, as competition increases, margins will be squeezed.


Equitymaster requests your view! Post a comment on "Pharma: Life styles matter". Click here!

  

More Views on News

Aster DM Healthcare (IPO)

Feb 10, 2018

Should you subscribe to the IPO of Aster DM Healthcare Ltd?

Dr Reddy's: Milestone Payment Drives Sales (Quarterly Results Update - Detailed)

Feb 9, 2018

US business was hit by pricing pressure although there was growth sequentially led by new product launches.

Lupin: US market Declines Due to Higher Base Effect of FY17 (Quarterly Results Update - Detailed)

Feb 9, 2018

Price erosion in generic US drugs continues but seems to be bottoming out.

The Power of 5 Minutes (The 5 Minute Wrapup)

Jun 16, 2017

Here's what you can expect from The 5 Minute Wrapup in the coming months and years.

More Views on News

Most Popular

This is Why the Stock of Jubilant FoodWorks Went Up 1,160%(The 5 Minute Wrapup)

Apr 12, 2019

This critical business strategy has enabled companies to scale their operations faster.

Pocketing Massive Gains with HDFC And HDFC Bank(Profit Hunter)

Apr 12, 2019

Here's how one could have generated gains of Rs 59,250 in 10 days by trading HDFC and HDFC Bank with a capital of Rs 4 lakh.

A Simple 3-Point Investing Manifesto for You the Indian Investor(The 5 Minute Wrapup)

Apr 11, 2019

A must have checklist for every investor in the Indian stock market.

My Master Series on How to Trade Election 2019(Profit Hunter)

Apr 16, 2019

For 30 years he has watched how elections impact the markets, and practiced how to profit from it. Now he is here...telling you everything. Read on...

Election Series: Follow the World's Biggest Traders To See Where the Money Flows(The 5 Minute Wrapup)

Apr 17, 2019

20% of all the traders bring in 80% of the money. Watch these 20% and you get a working idea of which way the wind is blowing.

More

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE HEALTHCARE


Apr 24, 2019 (Close)

COMPARE COMPANY

MARKET STATS