Gap between export and domestic sales of pharmaceuticals is widening
In the global pharmaceutical market, export will be the choice of Indian pharmaceutical companies and the gap between domestic sales and export would be almost doubled. Indian pharmaceutical industry has proved its mettle with growth in exports at a CAGR of 20% (FY03-FY07) to reach USD6.15 billion in FY07. Strong manufacturing base, cost competitiveness, network of laboratories and R&D, highly trained pool of scientists and professionals and growing biotechnology industry are some of the key strengths of Indian pharma industry that could enhance its export potential over the years. CRAMS has boosted bulk drugs export from India. Indian bulk drugs export showed a robust growth of 25% in FY07 over FY06. However, formulations export experienced higher growth than bulk drugs (28% in FY07 over FY06) due to widespread acceptability of Indian generics in the global market from the perspective of quality and price. It is a matter of pride that Indian pharma companies' Drug Master File (DMF) filings in USFDA has grown at a CAGR of 38% during 2003-06, which raises further the hope of increase in pharma export in the more regulated markets, the US and the EU. FDA's latest 'Generic Initiative for Value and Efficiency (GIVE)' is expected to further fuel the export plans of Indian pharmaceutical companies. With all these growth drivers and initiatives, it is expected that exports may surpass domestic market by 2012 and reach USD25 billion, while the domestic market may scale up to USD14.5 billion. Major Indian pharma companies are bound to cash on their export revenue barring the only concern that Indian rupee may further appreciate and it may impact the companies' balance sheets adversely, particularly SMEs, if not pharma majors.