Sales growth in low single-digits despite reasonable base
* Indian pharmaceutical market’s (IPM) secondary sales hit single-digit growth of 5.1% YoY in Oct’19 (v/s 11.9% YoY in Sep’19 and 9.5% YoY in Aug’19), despite a reasonable base (12.5% YoY growth in Oct’18). Volumes declined 2.7% YoY in Oct’19 (lower than 12-month rolling average of 1.5% and v/s 3.5% in Sep’19). Price growth remained steady at 5.1% YoY while new launch growth was 2.5% YoY.
* For three months ended Oct’19, growth was 8.8% YoY. Overall growth was driven by 5.6% YoY increase in prices and 2.6% YoY rise in new launch growth. Volume growth at 0.7% (v/s 3.2% in 2QFY20) dragged overall growth. Notably, both national list of essential medicines (NLEM) products/Non-NLEM products reported growth of 10.4%/8.6% YoY for the quarter.
* On MAT basis, industry grew 9.2% YoY with price growth of 5.2% YoY, volume growth of 1.4% YoY and new launch growth of 2.6% YoY.
Price – Key growth driver; Volumes drag overall growth
* In value terms for secondary sales, NLEM (~10% of IPM) growth came in at 5.3% YoY, while Non-NLEM (~86% of IPM) grew 5.1% YoY in Oct’19.
* Growth in NLEM products was driven by prices (+4.4% YoY) and new products (+0.4% YoY). Volume growth for NLEM products was +0.5% YoY in Oct’19.
Pfizer, Dr. Reddy, JB Chemicals – Outperformers for Oct’19
For Oct’19, Pfizer (+17.7% YoY) exhibited highest YoY growth, followed by Dr. Reddy (+17.5% YoY) and JB Chemical (+14.7% YoY).
* Pfizer’s performance can be attributed to strong double-digit growth in its top brands, especially in Anti-Infective/Hormones (+29.2%/+27.1 YoY). JB Chemicals was supported by strong growth in Cardiac (+26.7% YoY). Gastro intestinal/ Derma (+22%/+20.4% YoY) drove Dr. Reddy’s growth.
* Sun Pharma’s sales were impacted sequentially and grew 6.8% YoY (v/s 13.1% YoY in Sep’19), mainly dragged by muted +4.4% YoY growth in Neuro/CNS.
* Secondary sales declined for Ajanta (-2.3% YoY), Alembic (-3.4% YoY), and Natco (-13.4% YoY) for Oct’19.
* On MAT basis, JB Chemicals/Torrent reported highest price growth of 9.1%/8.1% YoY. AstraZeneca delivered highest growth in new product launches at +5.3% YoY.
Anti-infective/VMNs drag growth in terms of therapies
* Cardiac (~12.5% of IPM) exhibited highest YoY growth (+7.9%) among therapies in Oct’19. This was followed by growth in Anti-Diabetics (9.8% of IPM) at 6.4% YoY and Neuro/CNS (6% of IPM) at 6.1% YoY. Anti- Infective (13.4% of IPM) and Vitamin/Mineral/Nutrients (VMNs; 8% of IPM) grew moderately at ~2.9%/2.3% YoY for Oct’19
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