The agency stated that the IPM witnessed a YoY growth of 7.7 per cent in 9M FY2023 supported by a price growth of 6.8 per cent and growth of 2.3 per cent from new product introductions, while volumes declined by 1.2 per cent. ICRA predicts that price increases will remain the primary growth driver for IPM in the near term

The credit rating agency ICRA on Thursday said that despite several disruptive events over the last few years, the Indian pharmaceutical market (IPM) witnessed a healthy CAGR of 10.9 per cent between FY2012 and FY2022. And since FY2018, growth has largely been supported by price increases and new product introductions, even as volume increase remained between 2-3 per cent.

The agency stated that the IPM witnessed a YoY growth of 7.7 per cent in 9M FY2023 supported by a price growth of 6.8 per cent and growth of 2.3 per cent from new product introductions, while volumes declined by 1.2 per cent. ICRA predicts that price increases will remain the primary growth driver for IPM in the near term.

"Higher sales of anti-infectives, further supported by price increases taken to offset raw material cost inflation, aided the overall IPM growth of 14.6 per cent in FY2022. However, given the high base, the volume contracted by 1.2 per cent in 9M FY2023, even as price growth of 6.8 per cent continued to support overall IPM growth at 7.7 per cent in 9M FY2023," said  Mythri Macherla, Assistant Vice President and Sector Head, Corporate Ratings, ICRA Limited.

Given the large base of FY2022, the revenue growth for the ICRA sample set is likely to be lower than that of the IPM in FY2023. That said, steps being taken by these companies towards new product introductions and enhancements in field force are expected to support, the credit rating agency reported.

The acute therapeutic segment accounted for 62-65 per cent of the IPM between FY2018 and FY2022, a reduction from the 75 per cent share before FY2010. With an increasing incidence of lifestyle diseases and given the long duration of medicine courses for chronic diseases, the growth of chronic therapies in the IPM is expected to be higher than that of acute therapies going forward, ICRA said. 

Whereas revenues from the medicines listed in the National List of Essential Medicines (NLEM) constitute 17-18 per cent of the whole IPM, with some companies deriving 30 per cent of their revenues from NLEM drugs.