Indian pharma projected to hit US$ 57 bn by FY25

The Indian pharmaceutical industry is anticipated to grow 7-8% in the next financial year to reach US$ 57 billion by FY25, registering a compound annual growth rate (CAGR) of 6-8% between FY18 and FY23.

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According to the CareEdge report, Indian pharma, which has a significant presence in the generics segment, grew by almost 5% YoY to US$ 49.78 billion in FY23 and is expected to reach US$ 57 billion by FY25.

During FY18–FY23, the sector, including domestic and exports, grew at a compound annual growth rate (CAGR) of 6-8%, with exports growing at 8% and the domestic market growing at 6%.

In FY23, exports grew by just 3%, while the domestic market continued to grow at a healthy rate of 7% compared to the last year.

Pharma exports primarily consist of formulation products, and with a greater emphasis on the synthesis segment, complex and specialty products, as well as the easing of pricing pressure in US generics, are likely to support growth in the medium term.

The United States is a major export destination for the Indian pharmaceutical industry, accounting for approximately 30–35% of total formulation exports. In FY23, formulation exports to the US increased by 5.9%, primarily due to a 16% increase in sales volume.

Furthermore, price erosion in the US generic market has slowed to the low single digits, a significant improvement from the high double-digit erosion seen in the previous two years.

Looking ahead, approximately US$ 188 billion in drugs are expected to go off-patent globally between CY2023 and CY2026. The pharmaceutical industry in India now has the perfect conditions to take advantage of patent expirations and grow its market share.