Outlook uncertain for India’s generic drug makers: Fitch
The country is expected to retain its position as ‘pharmacy of the world’ despite challenges.
After its cough syrups were linked to child deaths in some countries, Indian generic drug makers will have to regain the trust of the global community if it were to retain its status as the world’s largest supplier of generic medicines, according to Fitch Solutions.
Significant damage has been done to India’s reputation nearly a year after the World Health Organization (WHO) and other regulators first revealed the potential link between the cough syrups manufactured by India-based Maiden Pharmaceuticals and the deaths of almost 100 children in Gambia and Uzbekistan, Fitch said in an analysis published last month.
The increased scrutiny of the US FDA on local manufacturers, which began during the COVID-19 pandemic, have also posed challenges to the country’s pharmaceutical production and exports.
“In light of these developments, India-based drugmakers will encounter several challenges in both maintaining and increasing exports in certain product categories, unless a significant operational and regulatory overhaul is conducted to alleviate concerns over generic product quality,” Fitch said.
Adding to the mounting challenges are intellectual property pressures that threaten India’s generic drug market and the affordability of its exports.
Despite the challenges, Fitch still expects India’s exported pharmaceuticals sector to post a compound annual growth rate of 12% in five years' time, growing from a US$20b industry in 2022 to a US$36b industry by 2027.
It added that the push to lower medicine costs in the US and the European Union presents growth opportunities for Indian generic drugmakers, while it is being supported by the robust demand for generic drugs across the globe.
“While the initial outlook for India-based generic drugmakers appears uncertain, the ongoing demand for generic medicines across the globe means we expect India to retain its position as ‘pharmacy of the world’,” it said.