As demand for India’s Covid-19 vaccines rise, export of general vaccines slides

Source: The Hindu Business Line, Feb 24, 2021

Hyderabad: Even as overseas demand for Covid-19 vaccines from India has been picking up, the export of other vaccines in general has declined.

As per data of Pharmaceutical Export Promotion Council’s (Pharmexcil) data, there was a dip in vaccine exports in the current financial year up to January, 2021.

Compared with $695 million of vaccine exports during April-January in the last financial year, it decreased to $648 million in the same period this financial year.

“At the same time, over all pharma exports are showing double-digit growth. We expect vaccine exports to pick up soon as Covid-19 threat fades away,” R Uday Bhaskar, Director General, Pharmexcil told Business Line.

Covid vaccines

The demand for India-made Covid-19 vaccines, however, has been steadily increasing, Bhaskar said.

As per official data, over 25 countries had already received Indian vaccines and about 60 had already expressed interest and are in the ‘waiting list’.

India’s mass vaccination programme is currently on with two vaccines, Covishield of Serum Institute and Covaxin of Bharat Biotech which have attracted global attention.

According to Krishna Ella, Chairman and Managing Director, Bharat Biotech,the company is in the process of filing regulatory documentation in more than 40 countries.

According to a senior executive of the Hyderabad based vaccine-manufacturer, the general dip in the vaccine exports is a `one-time’ phenomena mainly due to `special’ circumstances created by Covid-19 pandemic for the last one year.

“There are gaps and discontinuities in general immunisation programmes in many parts of the world in the last one year on account of Covid and general restrictions. There has been drop in procurement from some NGOs too,” he said. Many experts at Asia’s biotech platform, which concluded here on Tuesday, stressed the need to continue general immunisation programmes along with measures to tackle Covid-19 to ensure the well being of people across the world.

Covid push: Pharma exports surge 16%, defy broader gloom

Source: Financial Express, Jan 15, 2021

India’s pharmaceutical exports grew an impressive 16% year-on-year in the first eight months of this fiscal, defying an almost 18% contraction in the overall mechandise exports, as the Covid-19 pandemic caused a spurt in demand for medicines, especially from the largest market — the US.

The rise is remarkable, especially in the light of initial Covid-induced disruptions in the supply chain and the temporary restrictions on the exports of 26 drug formulations and active pharma ingredients (APIs) — including paracetamol, tinidazole and metronidazole — to keep domestic supplies steady.

Exports of the pharmaceutical products — comprising drug formulations and biologicals, bulk drugs and drug intermediates — hit $15.3 billion between April and November, against $13.2 billion a year ago, showed the commerce ministry data. The data don’t include exports of certain fine chemicals.

Excluding the outbound shipments of pharmaceuticals, overall goods exports would have shrunk at a faster pace of almost 20% until November this fiscal, against 18%. The US, which was hit the hardest by the pandemic, typically makes up for about 30% of India’s exports.

The commerce ministry data showed that while exports of drug formulations and biologicals jumped by close to 18% to $12.4 billion, those of bulk drugs and intermediates rose by just over 10% to $2.9 billion.

Meanwhile, imports of these pharmaceutical products rose by close to 9% on year in the April-November period to $4.2 billion. The Indian pharmaceutical industry is both an exporter to as well as importer of bulk drugs (APIs and intermediates that give medicines their therapeutic value) from China, the epicentre of the Covid-19. As much as 65-70% of these raw materials are imported from China. The increase in exports suggests raw material imports from China have largely stabilised now. A rise in India’s pharmaceutical exports also propped its outbound shipments of the borader chemicals segment and reversed a potential fall. Exports of chemicals and related products rose to $30.7 billion until November, up 2.4% from a year earlier.

India’s largest pharma IPO worth Rs 6,500 cr set to hit market next week

Source: Business Standard, Nov 04, 2020

Mumbai: Hyderabad-based Gland Pharma is set to launch its initial public offering (IPO) on November 9 to raise Rs 6,500 crore. One of the largest IPOs in the pharmaceutical sector in recent times, it will comprise a fresh issue of Rs 1,250 crore and an offer to sell up to 34.9 million shares.

The price band has been fixed at Rs 1,490-1,500 per share for the issue that will close on November 11. The primary issue is to raise Rs 1,250 crore, which the company plans to utilise for funding incremental working capital requirements of the company and funding capital expenditure requirements.

China’s Fosun Pharma Industrial Pte. is offering to sell 19 million equity shares. Gland Celsus Bio Chemicals is planning to sell 10 million shares. The other two shareholders — Empower Discretionary Trust and Nilay Discretionary Trust — are offloading 3.5 million and 1.8 million shares, respectively.

Fosun Singapore — a subsidiary of Shanghai Fosun Pharmaceutical Co. — holds 74 per cent stake in the company. Other investors of the company include Gland Celsus Bio Chemicals, which owns 12.97 per cent, while Empower Discretionary Trust and Nilay Discretionary Trust own 5.08 per cent and 2.42 per cent stake, respectively.

One of the largest pharma IPOs in recent times was Eris Lifesciences in 2017, which raised Rs 1,741 crore. Alkem Laboratories and Laurus Labs hit the capital markets in 2015 and 2016, respectively.

Shanghai-based Fosun had picked up 74 per cent stake — the largest such acquisition of an Indian company by a Chinese firm — in 2017 for around $1.2 billion. Interestingly, the IPO comes at a time when India-China relations are tense. The firm, however, claimed it runs its business independently and has had many investors on its board earlier. The bilateral relations of the two companies do not affect the day-to-day operations or business.

Gland Pharma reported a revenue of Rs 2,772.4 crore in 2019-20 (FY20) and a profit of Rs 772.8 crore. The revenue from operations has grown at a compound annual growth rate (CAGR) of 27.4 per cent between 2017-18 and FY20, while earnings before interest, tax, depreciation, and amortisation has grown at a CAGR of 36.9 per cent.

Established in 1978, the company has presence in sterile injectables, oncology, and ophthalmics and also focuses on first-to-file opportunities in the US.

The future plan

The Hyderabad-based pharma firm draws 97 per cent of its revenue from the business-to-business (B2B) model, and the US is the biggest market, contributing around 63 per cent of revenue in the first quarter this financial year.

In India, apart from a B2B business, it has a targeted business-to-consumer segment, too, and operates mainly in the hospitals segment.

Speaking to Business Standard, Srinivas Sandu, managing director and chief executive officer of Gland Pharma, said its business model involves focusing on margins. “We make all products at sites that are US Food and Drug Administration-approved. They are not always competitive in the Indian market,” he said.

One-third of its employees works on quality assurance and control. He also pointed out that they are scouting for opportunities in the fermentation-based bulk drug space. “We look at setting up a facility that may take years. We are open to acquiring a facility that makes fermentation products, which may be in India or outside the country. It can be Italy or China as well,” he added. The merger and acquisition activities, however, will not be funded through the IPO proceeds but through internal accruals and debt.

Indian pharma sector can grow to $ 65 billion industry by 2024: Sadananda Gowda

Source: LiveMint.com, Oct 15, 2020

Chemicals and Fertilisers Minister D V Sadananda Gowda has said India is one of the largest manufacturers and exporters of generic medicines across the world. During initial phase, he said, HCQ and Azithromycin was identified as one of medicines under treatment protocol for Covid-19 in emergency cases. Referring to India supplying these medicines to more than 120 countries across the world; he underlined that India thereby earned the reputation of reliable supplier of medicines.

Addressing a video conference ‘FICCI LEADS 2020’, the minister highlighted that India is one of the largest manufacturers and exporter of generic medicines across the world.

India is the only country with the largest number of US Food and Drug Administration (USFDA) compliant pharma plants (more than 262 including APIs) outside of USA and exports USD 20 billion worth of pharma products to various countries, including high standards complying countries like the US and Europe, he added.

“We are confident that the Indian pharma sector can grow to USD 65 billion industry by 2024,” Gowda said.

“This is a very very good time to invest and set up manufacturing base in India in pharma sector. One can enter India market through joint ventures also. The advantage is that you can get access to big markets like domestic Indian market, US, Japan, EU and South East Asia through India as far as pharma sector is concerned,” he said.

Best time to invest in pharma, medical device sector: Sadananda Gowda

Source: Business Standard, Oct 01, 2020

New Delhi: This is the most opportune time to invest in theIndian pharma and medical device sector as the government is extending production linked incentives for new manufacturing units in the upcoming bulk drug and medical devices parks,Union Minister DV Sadananda Gowda has said.

The Indian pharma sector, currently valued at USD40 billion, has the potential to become a global pharmacy hub in the coming years, the Chemicals and Fertilisers Minister said in a statement.

The sector is likely to grow to USD 65 billion by 2024, and to USD 120 billion by 2030, he added.

The medical devices industry in India has the potential to grow at 28 per cent per annum to reach USD 50 billion by 2025,Gowda said.

The Indian pharma and medical device sector has immense potential to contribute towards making India a 5 trillion-dollar economy in the next 4-5 years, he added.

The government is supporting development of 3 bulk drug and 4 medical device parks with state-of-art infrastructure and world-class centres of excellence across the country, Gowda said.

“Government will also provide production linked incentives to eligible new manufacturing units to ensure a level playing field to domestic manufacturers,” he added.

It is expected that the schemes of the government for development of bulk drug and medical device parks will attract cumulative investment of Rs 78,000 crore and can generate about 2.5 lakh employment,he added.

“There is a need for the pharma industry to focus on R & D activities in order to remain as one of the leading global suppliers of medicines,” Gowda said.

The full potential of growth cannot be tapped unless the sector comes up with discovery of new drugs or repurposing in India,he added. Gowda also expressed hope that the Indian pharma sector will be among the first ones to develop and supply low cost vaccines for COVID-19.

Specialty chemical firms pivot to pharma

Source: LiveMint.com, Sept 08, 2020

Specialty chemical firms are actively looking at the pharmaceutical sector as their next growth opportunity and to diversify from agrochemicals and technical textiles. They are seeing a surge in demand for intermediates or raw materials used for producing active pharmaceutical ingredients, following the coronavirus pandemic.

“In pharma, we have received a lot of enquiries to develop intermediates, especially after the pandemic. We developed an intermediate for a covid-19 drug, favipiravir, for some Indian and Japanese firms,” said PI Industries executive director Rajnish Sarna.

Specialty chemical firms, which were eyeing the intermediates business for the past few years, received a boost from the pandemic and the focus on localizing pharmaceutical supply chains.

PI Industries earns the bulk of its revenue from the agrochemical business. However, in the past three to four years, the company began to look at diversifying into other speciality chemicals such as pharmaceutical intermediates and imaging until it entered the segment this fiscal.

SRF Ltd, which is focused on the technical textiles segment, has also been focusing on pharmaceutical intermediates, a spokesperson said. In its annual report for 2019-20, the company said its pharma intermediates business is driven by its chemicals technology group division.

The global focus on a China Plus One strategy for investments will lead to a sharp rise in expansion of capacity in the chemicals sector in the coming years, said Deepak Nitrite Ltd CEO Maulik Mehta.

“Deepak Nitrite has several advanced intermediates that are used by the pharmaceutical industry. We are evaluating other chemical intermediates for the pharma segment and also plan brownfield investments to expand the existing business,” Mehta said.

Indian pharmaceutical firms at present source about two-thirds of their bulk drug supplies from China. However, the supplies, comprising active pharmaceutical ingredients and intermediates, saw several disruptions over the past few years. Supplies almost came to a halt in February and March because of the lockdown in China following the outbreak of coronavirus.

Analysts, however, foresee challenges for these speciality chemical makers as they move higher up into the pharmaceutical supply chains. “The jump from speciality chemicals to pharmaceuticals is not a big one in terms of technology, but meeting the stringent regulatory requirements in pharma will be a major hurdle. Also, because of India’s history of legal cases involving IP, changing large foreign drugmakers’ perspective would be a challenge for these firms,” said Vishal Manchanda, an analyst with Nirmal Bang Institutional Equities.

High sales, health focus make e-pharmacy hot

Source: ETRetail.com, Aug 23, 2020

Bengaluru: Consumer stickiness, average order size increasing to $15-20 and the possibility of selling other healthcare services like online doctor consultation and diagnostics services have caught the interest of large strategic names like Reliance Industries and Amazon, driving them to the e-pharmacy sector.

E-pharmacy had over 3 million users before the pandemic struck in India, according to a white paper from industry body Ficci and market research firm RedSeer, but added 6 million new customers since March. Industry executives said Reliance’s talks with Netmeds, which were on for at least six months, triggered the consolidation in the industry between two other established brands — PharmEasy and Medlife. The proposed merger came about after Medlife found it tough to raise capital from external investors.

“Our ecosystem was a crowded one and all the main four-five players were in the market to raise funds. Netmeds or Medlife were not able to raise from external investors and it reached a point that consolidation was inevitable. The ecosystem demanded there be fewer players and, on top of that, since Covid-19, digital health has become a top priority. So, the process got accelerated,” a top executive in the e-pharmacy industry said. The sector saw an investment of over $700 million in FY20, according to the white paper.

“What they (remaining players) are trying to do is build a break-even business here and then have a wider play on overall healthcare needs. So, this becomes a good customer acquisition channel, and then serve consumers with high gross margin products like a consultation and lab-test,” a former e-pharmacy entrepreneur said. According to him, medicine delivery platforms haven’t been able to top gross margin levels of 25-30%.

Ankur Pahwa, partner and national leader (e-commerce & consumer internet), EY India, echoed the views. “There is higher repeatability and retention for e-pharma, given the skew towards chronic ailments. Once on-boarded, customers tend to stay on even as discounts reduce over time. There is also the broader expansion into health tech around diagnostics, e-consultation, private labels, insurance, and wearables, which make it a larger opportunity,” he said. For most platforms, 60-70% of medicine order volumes are from chronic patients.

Top e-pharma founders and executives said, while online sales contribute just 3% of the total medicine market, the recent developments will have a lasting effect on the sector. This would include a gradual fall in discounts, which was 20-30% last year and is now already sliding towards 15%.

Giants like Amazon and Reliance would cautiously scale up the business amid the current regulatory framework. Industry executives said this will lead to a “mature” play by remaining players for the next one to two years. While all this happens, PharmEasy has also appointed JP Morgan for a new fund-raise of $100-200 million to prepare for the next round of battle in e-pharmacy. TOI had reported in its Friday edition that traditional chemists are alarmed by the recent developments and fear it could be monopolised over a period of time.

“The heavy competition and aggressive activity are all behind us now. No one can out-discount the others. The crazy discounting will certainly stop. Advertising spends might go up. This (aggressive discounts) only works when you are trying to be the last man standing,” said Prashant Tandon, co-founder and CEO, 1MG. “We expect the ecosystem to come to a steady and mature state. For us, pharmacy is a little over 50%. The other digital health business — since Covid-19 — has taken off, making us a much broader digital health platform,” he added.

“Reliance’s entry is a validation of the space and the online model. It’s good news for the sector and more people will try online medicine ordering,” said Dhaval Shah, co-founder of PharmEasy. He did not comment on his fund-raise initiatives, or the progress of the merger with Medlife.

Domestic pharma market to grow 12-14% in 3 years, exports by 8-14%: KPMG

Source: Business Standard, Aug 19, 2020

New Delhi: India’s domestic pharmaceuticals market is expected to grow by 12 to 14 per cent in the next three years while the export market may grow by 8 to 14 per cent, according to a new report by professional services firm KPMG.

Backed by a $41 billion pharma industry, the country ranks as the third-largest market globally by volume and 13 largest by value. The epidemiological transition from communicable diseases to noncommunicable diseases in the country is driving the pharma market.

At the same time, said the report, India is a key component of the global life sciences industry.

Its manufacturers are one of the largest sources of generic drugs, supplying 50 per cent of global demand for a range of vaccines, 40 per cent of generic demand in the United States — where Indian firms are expanding — and 25 per cent of UK medicines.

However, there have been calls for a more robust domestic industry. This is particularly timely as the Covid-19 crisis emphasises the importance of localising parts of the value chain and ensuring multiple sourcing close to consumers.

In March, the government announced a 1.3 billion fund to encourage domestic manufacture of pharma ingredients.

This follows severe supply chain disruption amid the coronavirus pandemic due to India’s dependence on imports from abroad. About 70 per cent of the country’s active pharma ingredients (APIs) and 60 per cent of penicillin are imported from other Asian countries.

The government is aiming to increase healthcare spending through schemes like Ayushman Bharat. The country also aims to increase its public health spending to 2.5 per cent of its GDP by 2025.

The rising level of health consciousness among people and their awareness of treatment options as well as modern medicines are also contributing towards the growth of the Indian pharma industry.

Long known as a low-cost manufacturing location, the confidence in product quality has been a challenge. However, said the KPMG report, new safeguards on manufacturing and product standards are providing much-needed reassurance to customers at home and abroad.

Amazon enters online pharmacy space in India

Source: Business Standard, Aug 14, 2020

E-commerce giant Amazon has forayed into the online medicine segment and launched Amazon Pharmacy. The service has been started in areas with select pin codes in Bengaluru, while the company is learnt to be mulling scaling it up to other cities across India in the near future.

The service would allow customers to order prescription-based medication in addition to over-the-counter medicines, basic health devices and Ayurveda medication from certified sellers.

“As a part of our commitment to fulfill the needs of customers, we are launching Amazon Pharmacy in Bangalore,” said an Amazon India spokesperson confirming the development. “This is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home,” the spokesperson said.

Amazon’s foray into the online medicine segment puts it in direct competition with established local players including NetMeds, 1mg, PharmEasy and Medlife. Amazon has launched the service at a time when there is a tremendous demand for such services which are delivering essential medicines to patients amid the Covid-19 pandemic. An increasing number of people are buying products online and avoiding visiting the stores due to fears of catching the virus.

However, it is not going to be easy for Amazon to tap the e-pharmacy space due to the regulatory hurdles and the ongoing war between online and offline pharmacies and the delay in finalisation of e-pharmacy rules by the government.

Recently, the All India Organisation of Chemists and Druggists (AIOCD), representing more than 850,000 pharmacy outlets across the country wrote a letter to Prime Minister Narendra Modi with a request to ban the activities of e-pharmacies in the country.

Last December, the health ministry came up with revised draft regulations for online sales of drugs. It said e-pharmacies cannot stock drugs and will have to operate through retail chemist shops for doorstep supply of medicines just like food-delivery platforms Swiggy and Zomato. The draft regulations also make retail pharmacies eligible to deliver medicines at a customer’s residence.

The Indian e-health sector is expected to become a $16 billion opportunity by FY2025, growing from $1.2 billion, at a compound annual growth rate of 68 per cent, according to a report by research firm RedSeer Consulting. It is expected to touch 57 million households, driven by positive reception from both consumers and providers along with supportive government regulations and investments.

According to RedSeer, the overall Indian healthcare industry is set to grow at 17 per cent CAGR until FY2025 to reach $353 billion (7 per cent of the expected nominal gross domestic product). In May, Amazon also announced its entry into online food delivery in India. Customers are now allowed to order from select restaurants and cloud kitchens that have cleared the company’s hygiene certification bar.

Domestic pharmaceutical industry to clock 4-6% growth in FY21: Icra

Source: Business Standard, Aug 05, 2020

Mumbai: Indian pharma industry is likely to clock 4-6 per cent growth during the current fiscal, according to credit rating agency Icra.

The domestic pharma industry has been posting slow growth numbers since March after the coronavirus (Covid-19) pandemic hit prescription generation. However, green shoots started becoming visible in June when the sector clocked a 2.4 per cent growth after a near-9 per cent fall in May and an 11 per cent slump in April.

Gaurav Jain, vice president and co-head, Icra, said, “The global demand scenario is largely expected to remain stable for Indian pharmaceutical industry owing to the inelastic nature of prescription drugs, though some impact on volume growth will be felt owing to the lockdown (lesser OPDs/elective surgeries) and lower economic growth.”

He said that the impact of lower demand will be felt more in less developed countries which are additionally impacted owing to low crude oil prices.

Overall, Icra expects the domestic pharma industry to grow at 4-6 per cent in FY21 owing to the coronavirus impact.

Icra, however, estimates that through FY20-FY23, CAGR is expected to be in the range of 8-11 per cent on the back of healthy demand from the domestic market, given the increasing spend on healthcare along with improving access.

The growth in FY21 is expected to be supported by a 1.88 per cent wholesale price index-linked price hike for the domestic price controlled (products that fall under the National List of Essential Medicines) portfolio.

The Indian pharmaceutical industry’s growth remained stable at 8 per cent during FY20. According to Icra research, manufacturing activity has gradually started in China with shipments or air cargo arriving in India for APIs, intermediates and KSMs (Key Starting Materials). This has led to a resumption of production by Indian players though the capacity utilisation across plants is yet to reach pre-Covid-19 levels.