Indian pharma industry may rebound to 8-11% growth rate, says Alkem

Alkem Laboratories expects the Indian pharmaceutical industry to rebound to 8-11 per cent growth rate with normalcy in activities as the pandemic eases out but feels inflationary pressures and evolving regulatory norms will be key risks to watch out for.

In its annual report for 2021-22, Alkem said the future of the domestic pharmaceutical market continues to hold immense potential led by favourable demographics, growing disposable incomes, increased access to healthcare facilities, growing consciousness towards healthcare, and increasing penetration of medical insurance.

On the outlook for the domestic business, it said,"With easing out of COVID-19 restrictions, resumption of travel, normalisation of supply chain and manufacturing activities, reopening of schools and offices, and a resumption of deferred elective medical treatments, the Indian pharmaceutical industry is expected to rebound to a normalised growth rate of 8-11 per cent."

The company said that globally also, COVID-19 related quarantines and shutdowns led to deferment of elective medical procedures and patients remaining less engaged with healthcare, resulting in delayed diagnosis and treatment, especially for those conditions which were asymptomatic.

However, Alkem said,"inflationary pressures in terms of higher raw material and packaging material prices, increased freight rates, and evolving regulatory norms will be the key risks to watch out for."

Maintaining its positive stance on the Indian pharmaceutical market, Alkem said its "dominance in the acute segment with market-leading mega brands, a large field force, and a widespread supply chain and distribution network puts Alkem on a strong footing in the domestic market."

In the chronic segment, the company is growing "at a fast clip" to emerge as a significant player. Regular new product launches, including biosimilars, should continue to contribute to its growth and fill portfolio gaps.

On other growth drivers, Alkem said entry into new therapies/sub-therapies would also be an important lever of growth going forward.

On the outlook for the US business, the world's largest pharmaceutical market, Alkem said led by new product launches and USFDA compliant manufacturing facilities, it is positive about its growth prospects there despite the pricing challenges, intense competition, and stricter regulatory compliance requirements.

It has a robust pipeline of over 160 abbreviated new drug applications filed with USFDA with a "healthy mix of Para IV and first-to-file (FTF) opportunities, which gives it good visibility of growth over the medium term".

Over the long term, Alkem said it expects to launch biosimilars in the US market through its subsidiary Enzene Biosciences. It would also strategically look at in-licensing opportunities, alliances, and partnerships to enhance its capabilities and product portfolio, to gain further market share in the US pharmaceutical market.