Davos WEF 2018: Downturn In Generics Won’t Last Long, Says Sun Pharma Chairman
Indian drugmakers will increase share of the generics market while the downturn lasts, says Sun Pharma chairman.
The downturn in generic pharmaceutical business won’t last long and the industry will come out of it stronger, according to Sun Pharmaceutical Industries Ltd. Chairman Israel Makov.
But while the downturn lasts, drugmakers will find several merger and acquisition opportunities, Makov told BloombergQuint’s Menaka Doshi on the sidelines of the World Economic Forum 2018 at Davos, Switzerland. Indian pharma companies, already playing a role in the consolidation process, will increase their share of the generics market not only in the U.S. but also in other markets, he added.
A consolidation among pharmacies and intensifying competition have sent prices for generic drugs in the U.S., the world’s largest market for medicines, into a tailspin and has left the global industry scrambling to adjust. Sun Pharma has warned that revenue this year may come in lower than the last. The world’s largest generics maker Teva Pharmaceutical Industries Ltd. said it will eliminate 25 percent of its workforce and sell assets in an effort to cut costs.
Makov, formerly chief executive of Teva, expects the pricing pressures in the U.S. to be a temporary phenomenon. “The generics business is an important part of the healthcare industry and there is a limit for price pressures. When you exercise more price pressure, you have supply problems,” he cautioned.
Besides pricing, Indian drugmakers are also battling continued regulatory concerns in the form of import alerts from the U.S. drug regulator, which has hit profitability.
According to Makov, Indian industry is upgrading operations as a response to tighter regulation and increased scrutiny from the USFDA. “Yes, its a pressure, but it’s a positive pressure. At the end of it, industry will produce better and more competitive products.”
Sun Pharma is waiting for USFDA re-inspection of its Halol and Kharkhadi plants.