💊 Indian Pharma Sector Is A Multibagger; Homegrown Cos Are In For A Treat

The Indian pharmaceutical sector is all set to leapfrog — and why not? With the government having its back, the emphasis on creating a Fit India and Aatmanirbhar Bharat is greater now than ever.

In the words of Union Minister Mansukh Madaviya, “it’s time to move from “volume” to “value” leadership and accelerate domestic production. The priority remains to live off our own land.”

The roadmap for the pharma sector and India’s Pharma Vision 2047 were also outlined. Long-term, industry-friendly, and investor-promoting policy culture will take a front seat, besides boosting technology, manufacturing capacity, and R&D.

The seeds that were sown are being witnessed as businesses buckle up, and regulations streamline. Homegrown pharma major Dr.Reddy’s Laboratories (DRL) has struck a deal with KKR-backed JB Chemicals & Pharmaceuticals to sell its 4 pediatric formulation brands for Rs.98.3 Cr.

The four brands are zinc supplement Z&D, insomnia medication Pedicloryl, antibiotic Pecef, and Ezinapi, which is used against diaper rashes. The four brands combined had sales of Rs 33 crore in the fiscal year ended March 31, 2022.

It is also eyeing a place among the top 5 in the domestic market with a strategy driven by mergers and acquisitions, in-licensing deals targeting chronic categories, and portfolio broadening.

Notably, India was the 5th largest contributor to DRL’s overall sales of Rs. 21,439 Cr in 2021–22. The Hyderabad-based company fared better than the sector average by almost 8–9%.

As for the regulators, the drug pricing watchdog, National Pharmaceutical Pricing Authority (NPPA), has recently fixed the retail prices for 84 drug formulations. This is a move to recover amounts overcharged by manufacturers and monitor the prices of decontrolled drugs to keep them at reasonable levels.

Too long? Here’s a one-liner: Govt. outlines the roadmap for India’s pharma sector; drug pricing regulator NPPA fixes retail prices of 84 formulations; Dr.Reddy’s Lab plans M&A to catapult growth numbers.

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