Indian pharmaceutical market contracted 5.9 percent in first quarter of FY21. The contraction was largely due to supply chain disruption on account of COVID-19 lockdown and steep fall in the sales for acute therapies such as anti-infective drugs, gastrointestinal and pain and fever medications, according to data released by market research firm AIOCD.
The chronic segment that includes drugs for cardiovascular, diabetes and neuro too saw a slump in sales in Q1FY21 due to pre-emptive buying in March.
"Because of the lockdown, there is a drop in infection rates; this led to lower anti-infective sales, associated co-therapies such as gastro, pain and analgesics also get impacted," said Ameesh Masurekar, Director AIOCD Pharmasofttech AWACS Pvt Ltd.
The anti-infective, gastro and pain together constitute about one-third of Indian pharmaceutical market which is around Rs 1.42 lakh crores.
Anti-infective segment that alone is around 13-14 percent of the market saw sales declining by 17.3 percent in Q1FY21. Gastro segment grew at just 0.4 percent and the Pain segment declined 1.9 percent in May.
Masurekar expects growth to be muted in FY21.
This was the worst ever performance of the Indian pharmaceutical market in history. The last time the Indian pharma market had been through such situation was during the rollout of GST, when the market grew just 1 percent in Q2FY18, due to destocking of inventory by distributors and retailers.
On the positive side, there was a significant recovery in June after April-May washout due to easing of lockdown.
There was a significant revival in some therapies; cardiac segment registered a monthly growth of 13.9 percent in June compared to 3.9 percent in May; anti-diabetic medicines registered a growth of 8.5 percent in June compared to 1.1 percent in May and respiratory medicines also exhibited a similar trend of 4.2 percent growth in June compared to 5.9 percent negative growth in May.
As per AIOCD data, the impact was more prominent in acute-heavy portfolio companies such as Alkem, GSK, Dr Reddy's, Abbott, among others in the April-June period. There was a drop for Alkem - 10.4 percent, GSK - 15.1 percent, Dr Reddy's - 7.1 percent, Cipla - 6.3 percent and Abbott - 8.1 percent. The companies that managed to do well even during the lockdown period included Ipca, that grew 9.9 percent, Pfizer at 5 percent and USV at 7.3 percent.
Market leader Sun Pharma's domestic formulation business too declined 2.5 percent in Q1FY21.
"There has been a supply chain disruption in the domestic formulation (DF) segment in terms of manufacturing as well as logistics due to the lockdown implemented on account of COVID-19. While capacity utilisation has improved 50-60 percent and distribution is moving toward normalcy, managements have cited that patient-doctor connect is gradually improving. This is positively impacting demand for medicines, especially for products related to acute therapies," said Motilal Oswal in its recent report.