Price control, ad-hoc regulatory changes and new policies may hamper pharma sect

Leading pharma firm, Pfizer, fears that the pharma industry is expected to face challenges from price controls, ad-hoc regulatory changes and new policies that may impact sustainable growth.

“Even though economic outlook is expected to remain positive, there are several headwinds in the healthcare and pharmaceutical regulatory space,” the company had said in its annual note to shareholders.

“While implementation of large-scale healthcare initiatives expected to provide a boost to the pharma industry, there will be continued challenges in the areas of price controls, ad-hoc regulatory changes and new policies that may impact predictability and sustainable growth,” it added.

The Indian pharma market (IPM) stood at Rs. 121,833-crore at the end of the financial year 2018, growing at 6.3 percent over the last 12 months period. This represents a significant slowdown from the historic 13-14 percent CAGR trends (2010-2016). This slowdown was largely due to regulatory, policy and GST challenges that impacted industry performance. “We will continue to face policy unpredictability that will impact our operating environment. During FY18, a process to amend the Drug Price Control Order (DPCO) was initiated that may again change the price control methodologies in India. The industry may also continue to see changes in policies around labelling requirements and revisions to the essential medicines list,” Pfizer’s Managing Director Mr. S. Sridhar said.

Performance

Pfizer’s sales for the financial year ended 31 March, 2018 were Rs. 1,925-crore as compared to Rs. 2,017-crore in the previous year, which represents a decline of 4.6 percent. The profit after tax grew by 6.9 per cent to Rs. 360-crore in FY18 as compared to Rs. 337-crore in the previous year.

Commenting on the future growth plans, Mr. Sridhar said, in the next few years, new introductions and volumes will be among the most important drivers of growth. Global teams are working with our medical and marketing colleagues to further strengthen the India capabilities and support new launches, he added.