Covid-19 impact on MSMEs in pharma

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India’s pharmaceutical sector, which has MSMEs as its key growth driver, is staring at shortening revenue growth and dissolution in operating profitability this financial year.

Higher prices, slower growth in exports of raw materials known as bulk drugs or (API)Active Pharmaceutical Ingredients, rising input costs for corrugated box makers, shipment challenges including container shortage, and more are likely to cost pharma industries this fiscal growth.

An impact will presume the consequences, as the sector had leveraged pandemic-convinced opportunity in selling Covid related drugs and vaccines to other countries.

TV Narayana, National President of the Indian Pharmaceutical Association, said in a report, Exports must have diminished as production has come down.

On which the industry depends on a massive part of bulk drugs, there are curbs on imports from China.

Therefore, revenue will go down this year even as the government has given some reassurance a few months back to concentrate on the domestic bulk drug industry.

Hence, setting up pharma groups in different areas will take some time, and the growth will be affected.

IPA is a national body signifying over 10 lakh pharmaceutical scientists and pharmacists of industry, academia, regulatory, hospital, and community pharmacy.

The key factor that was likely to harm the Indian pharma sector was the power disaster in China almost 70 % of APIs needed of Indian pharma businesses were accomplished by imports from China.

Still, as the coal crisis not just in India but China as well begins to poise, the gradual rising in coal supplies at power plants, with this challenge will be getting moderated progressively.

The decline in revenue increase is likely to be from 12.5 % last fiscal to 9 % this fiscal due to slower growth in exports despite some provision from Covid vaccine probabilities and a pick-up in demands in the domestic formulations market, said rating agency Crisil for their statement.

The formulation is quite a process of merging different chemical substances with the active drug to produce the final medicinal product.

The result is an extension in exports is likely to be 5 to 2 % this fiscal into 23 to25 % on the back sales of Covid-19 on relevant drugs and vaccines in semi-regulated and regulated markets.

 The agency added citing its study of 207 pharma firms that estimated 55 % of the Rs 3.2 lakh crore in a year of revenue for the sector.

A statement comes under Crisil, continuing the pricing pressure in the price cap for products and the US under the Drug Price Control Order in the domestic market will curb the player’s capability to pass on the rise in input prices.

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