ValuePickr Forum

Indian pharma: Industry perspective

Considering current USDINR 71 price, my opinion is good to invent more in excellent track record export oriented pharma companies.

Thanks,
Manish

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The generic drug approvals trend in the US -


Note: FDA’s fiscal year (Fy) runs from Oct 1 to Sep 30. *Fy2019 data is for 3 months from Oct to Dec 2018.

  • A record 781 ANDA approvals in the Fy18 (Oct '17 to 'Sep 18) period by the USFDA.
  • At 278, approvals remained very high in the Dec '18 quarter.
  • Fy19 may surpass Fy18, given that ANDA backlog is still over 3,500.
  • Ever-increasing approval trend is likely to continue in Fy20.

On the positive side -

  • ANDA filings have relatively slowed in recent months.
  • ANDA withdrawals have increased since last 12-15 months.

Trend indicates pricing pressure in the US market is unlikely to abate anytime soon. That said, there are pocket of opportunities arising from exit of Teva and Mylan from many drugs, Chinese API issue, some drug shortages, value erosion of base business lesser than revenues from new product launches, etc.; mainly stock specific opportunities.

Source:

  1. Raw data: FDA site
  2. The livemint article (thanks to @mrai74 for posting this on one of the thread @ VP).
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We shouldn’t generalise it but seems pharma industry is seriously lacking expected practices. These incidents will certainly delay the recovery of health of Indian Pharma industry

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Pharma sector has been going downhill all the way. Please share the way forward for this sector and preferred stocks

Pharma sector is facing lot of headwinds

  1. USA market is very price sensitive and low margin business. Infact ROW and Brazil are better bets. Things in USA may seem to have stabilized but more players will enter and competition may not allow any price increase. Specialized high end products may be the only way out and in that space sun, natco, drl are better placed it seems. But then growth will be linked to patent status and launch date of these.

  2. Domestic market : Dcgi is making things difficult by new regulations and slower than expected approvals. Many FDCs are banned and many are going under NLEM capping the price. As per March Gazette, para 13 retailer margin of many expensive formulations is capped. Plus NPPA is getting strict on pricing.

  3. Policy : generic drugs are now gaining traction and many exclusive stores are.coming up for generics. This will pose challenge to many companies engaged in ethical business. Cipla generic division is number one in India.

So I feel pharma will not see rapid growth in foreseeable future.

Things are not very rosy at present in Europe also.

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https://www.moneycontrol.com/news/podcast/digging-deeper-indian-pharma-tastes-its-own-bitter-medicine-seven-companies-named-in-the-us-price-fixing-lawsuit-4043631.html

Which are listed Medical Devices players in India namely in Cardiovascular and Ortho fields ??

Cipla has some stake in device company. But unfortunately management control is with other gentleman who is not very gentle. So its probably dud for cipla.

Does anyone know the implications of “observations” made after a US FDA audit?

Disc: Heavily invested

Observations are the points where FDA has sought clarification from the company. The company has to send the reply on observations within stipulated time which is 15 to 20 days. On receipt of that response FDA further evaluates and give its comment.

Observations per se has no business impact. But if the response are not acceptable or to the satisfaction of fda they may issue warning. Warning letter will mean no new products can be manufactured at that site but existing business continues. Meanwhile company keep sending response to the observations to satisfy the authority. Generally it takes 6 months or more to reach the warning letter stage.

If these efforts also fail, then import alert is issued and existing business also stops. This takes few more months.

This is my understanding…

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https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/strides-pharma-science-limited-576722-07012019

“During the inspection, our investigator observed discarded CGMP documents and evidence of uncontrolled shredding of documents. For example, multiple bags of uncontrolled CGMP documents with color coding indicating they were from drug production, quality, and laboratory operations were awaiting shredding. Our investigator also found a blue binder containing CGMP records, including batch records for U.S. drug products, discarded with other records in a 55-gallon drum in your scrap yard. CGMP documents in the binder were dated as recently as January 21, 2019: seven days before our inspection. Your QU did not review or check these documents prior to disposal.”

“In your response you state the binder of CGMP documents in your scrap yard was “inadvertently come [sic] to scrap yard” and that you were investigating the issue.”

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image

worth a look … with a pinch of salt

Unlike small molecule generics, …biosimilars that are approved by the USFDA need to be promoted under brands and are not interchangeable for innovators’ brand prescriptions…the USFDA issued guidelines …have raised the entry barrier for biosimilar players…Unless biosimilar are interchangeable, they remain prone to competition from biobetters.

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Indian pharma exports may grow by 15% and touch USD 22 billion during the current financial year against USD 19.14 billion in FY19.

The cumulative growth of Indian exports for the period April-July was 13 per cent. As of June 2019, India’s generic pharmaceutical exports have grown almost 2.7 to 2.8 times faster than the market (global generic market).

As exports have grown by 13% in first four months & expected to grow 15% YoY, it is a clear indication that the growth will pick up in balance period, which was already 21.7% in July.

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