Pharma market grew just 1% in Nov as sales contracted

The Indian Pharma market grew just 1 per cent in November. During the past six months cardiac therapy had been growing in high teens; contracting now to single digits. Overall, sales of chronic brands grew 3 per cent while acute therapies continue to struggle, their sales being down 1 per cent. Volume decline for the industry continued in November. It was down 7 per cent while blended price growth was 5 per cent, with new-product growth of 3 per cent.

Company performances: Listed pharma companies which did relatively well in November were Glenmark (up 14 per cent aided by the launch of Fabiflu), Ajanta (13 per cent), Cipla (13 per cent) JB Chemicals (10 per cent) and Sanofi India (9 per cent). Ajanta (volumes grew 6 per cent) and Sanofi India (2 per cent) were among the few whose volumes grew. Sales of Natco declined 32 per cent due to a slowdown in oncology brands. Secondary sales of AstraZeneca (8 per cent), GSK (3 per cent) and Indoco (3 per cent) continued to decline in November.

Therapeutic performances: Cardio grew 8 per cent to Rs 17 bn in November and continues to be the fastest-growing therapy in India. Other chronic therapies such as vitamins grew 7 per cent, and anti-Diabetes sales were up 2 per cent. While sales of acute therapies such as Anti-infectives (flat growth) and Gastrointestinals (up 3 per cent) are picking up, some pressure can still be seen in Respiratories (-7 per cent) Ophthal (-11 per cent) and Pain (-4 per cent).

Launches, Brand performances: Covid-19-related-treatment brands have added sales of over Rs5bn for MAT November. Key brands such as Faviflu, Remdac and Cipremi are clocking monthly sales of Rs400m each. Sales of Sanofi's influenza vaccine brand, FluQuadri, shot up 124 per cent to Rs 265 million in Nov. Eleven of the top-20 brands in the IPM grew ahead of their therapeutic growth on a MAT basis.

Our view: The drop in sales of acute brands continues to pull down industry growth. Besides, due to limited diagnosis and new-prescription generation, growth in chronic therapies has moved down to single digits. The industry continues to hike prices (~5 per cent in November), and Covid-related products (MAT sales of over Rs 5 bn) continue to add to growth.

We expect volume growth to recover in the near term as the number of prescriptions dispensed and surgeries may increase in the last part of this fiscal. In the current context, we expect performances of MNCs such as Abbott and Pfizer to be robust. The domestic ranges of therapies of select Indian companies such as Torrent, Sun, Lupin and Ajanta are expected to outstrip the market in FY21.

(Anand Rathi)