Indian Pharma's US Play

Home-grown smaller players are giving biggies a run for their money in the US generics market.

-  V. Keshavdev

Big Pharma is not going to have it easy. US President Joe Biden’s executive order in July aimed at tackling high prescription drug prices by promoting generic and biosimilar competition could well mean that the pain for Indian pharma players in the world’s biggest market — $370 billion — is not going to end anytime soon.

Following the order, in the first week of September, the US Department of Health and Human Services presented a report to the White House Competition Council, stating that Americans were being ripped offthrough prescription drugs. “We pay the highest prices in the world, which leads to higher spending. Higher spending puts pressure on private and government payers to raise premiums or make benefits less generous. Lack of affordable access to prescription drugs and other healthcare services leads to worse health outcomes,” according to the report.

Of the $370-billion US drug market, generics account for $127.8 billion, with 9 out of 10 prescriptions comprising generic drugs, says IMARC, a market research agency.

The growing chorus around affordability means Indian pharma players, who have been battling severe erosion in generic prices since FY14, will continue to do so in the near future as well. “Generic drug prices in the US have dropped year-on-year for the past five years and the pressure continues. This is already having an impact on the margins of generic pharma companies operating in the US,” says Ranjit Shahani, chairman, JB Chemicals and Pharmaceuticals, and president emeritus, Organisation of Pharmaceutical Producers of India (OPPI).