Good news on the horizon for Indian pharma as FDA ramps up approvals
- Analysts expect the period between March 2015 and March 2016 to be much better in terms of earnings for the Indian pharmaceutical industry, which has consistenly come under attack over manufacturing compliance issues, than the comparable period last year thanks in large part to more FDA drug approvals.
- The FDA revamped its generic approval process in 2012, which led to a slowdown in approvals in India, which has also faced numerous quality-control issues at various manufacturers' plants, leading to revenue declines.
- Other factors which have contributed to declining revenues include China's currency devaluation in August and currency instability in Russia and Latin America.
There's been a lot of negative publicity around companies like India's Sun Pharmacueticals, which has continutally had to retrench to address quality-control and data-integrity issues in the face of increased FDA inspections.
However, companies such as Lupin, Aurobindo Pharma, and Glenmark Pharmaceuticals are poised to benefit from the accelerated pace of FDA approvals, with perceptibly improved profits showing up in the second half of the year.
Considering the fact that India pharma's sales growth in the U.S. was 14% year-to-year in March 2015, compared with more than twice as much for the comparable period ending March 2012, the $15 billion Indian pharmaceutical industry is eagerly anticipating the turnaround and poised to resume higher rates of growth.