One would think that the one industry that rapidly shot up last year during the pandemic would be pharma. One would be wrong. India’s pharma industry, worth $20 billion, which was previously growing at the rate of 9.5-10% year-on-year, slumped to less than half at 3-4% over the last year.
India is home to more than 3,000 pharma companies, but 26 companies control up to 70% of all drug sales. Of these, the top five domestic players are Sun Pharmaceutical Industries, Abbott India Ltd, Cipla Ltd, Mankind Pharma and Zydus Cadila. To understand the industry’s drop in growth, The Ken analysed sales values for the top 26, and presented the top five in Covid and Non-Covid drug categories. The data is sourced from pharma market research company AIOCD AWACS.
Now, imagine these five companies in a Formula One car race. Each player inching past the other, wanting to zoom ahead. But mid-race, the weather changes to stormy clouds and rain—think: the pandemic—and sets them all back by many laps, making the finish line of projected yearly growth impossible to cross.
It’s a bit like that.
In 2017, drug sales of Sun Pharma which were growing at 9.28% on an annual basis, grew only 4.43% in 2020. Zydus, meanwhile, had registered 7.18% sales growth in 2017, peaking to 12.67% in 2019, it sharply plummeted to 3.99% growth in 2020.
This is despite the unfettered sale unfettered sale Business Standard Covid-19 drug sales shine even as domestic pharma market slows down Read more of Covid-related drugs. Cipla and Zydus, for instance, sold hundreds of crores worth Remdesivir, a crucial antiviral used for serious Covid patients. While Zydus’ growth fell massively, Cipla barely managed to stay afloat with 8% growth year-on-year from 2018 to 2020.
This is probably because Covid-related drug sales were merely a drop in the ocean.
That’s right, despite the raging pandemic that has led to over 10 million cases in India, the sales for Covid-related (allopathic) drugs—anti-virals, antibiotics, certain categories of vitamins and supplements from the top 26—totalled to Rs 4136.8 crore ($570 million). This is less than the total drug sales value—all ailments considered—of just Zydus, which saw an overall drug sale of Rs 6128.4 crore ($840 million).
(If you’ve noticed the one company that sticks out for doing phenomenally well in 2020—Glenmark—we’ll get to that shortly. For now, just remember that it recorded a 16.13% growth in sales last year compared to 9.93% growth in 2019, making it the only company to register a positive growth.)
Here’s the catch.