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Domestic sales of pharmaceutical products rose by 12.8% in the September quarter (Q2), much higher than the growth seen in the previous two quarters, according to data from market research firm AIOCD Awacs.
Indian companies have been finding it difficult to grow in the US and in the domestic market, both of which are chief contributors to revenue. If the domestic market sustains this revival in growth, companies can breathe easier in FY17.
The NLEM market (New List of Essential Medicines), which is subject to price control, saw a decline of 1% during the quarter. This has been one of the factors holding down growth but the decline has not been as severe during the quarter.
The ban on fixed dose combination drugs was another event that affected sales. In the September quarter, that has seen a decline of 16%. If the market has grown by 12.8% even then, that is because the remaining products have done quite well.
The quarter’s sales growth numbers give confidence that the industry is getting back on its feet. Note that these numbers are based on sales to customers and can vary from the reported sales performance, which depends on the sales made by companies to their distribution channels.
Thus, these numbers may be different from what one sees when companies report results. It would be safe to assume, however, that sales growth in the September quarter in the domestic market should look better.
The risks are mainly from new drugs being brought under price control.