The past few years have been nothing short of a nightmare for Indian pharma. But, barring the recent lean patch, the industry has had a stellar decade. Estimated at $30 billion by sales and representing 12% share of the global generic drug market, the domestic pharma industry has indeed come of age. In the past 10 years, the industry’s revenues, gross profit, and operating profit have risen at CAGRs of 18%, 20%, and 23%, respectively. According to a report by Morgan Stanley, after starting out in the 80s as active pharma ingredient and small domestic formulations players, the industry has upped up its game to comply with international standards to build a profitable export business.
Today, the overseas market remains the biggest revenue driver, with the US emerging as the biggest market. In just 10 years, Indian pharma has gained ground in the US at the expense of incumbents (existing US and EU players), and today accounts for 25% volume share and about 16% value share of the generic drug market. The rapid rate of patent expiration has been the biggest growth driver. Roughly $178 billon in branded drugs have gone off patent in the past, translating into the newer product opportunities for generic India drug companies. In the past 10 years, India pharma companies’ US sales have clocked 33% plus CAGR and. And looking at the quantum of patent expiries in the near future, the US will continue to remain the jewel in the crown for the pharma industry.