Goods and Service Tax (GST) rolled out almost a year ago on July 1, 2017 in India. The Indian pharmaceuticals industry saw a negative to stunted growth due to various challenges of Harmonized system of Nomenclature (HSN) codes, new registration of GST network, changed way of accounting and much more. Post-GST, the fiscal year 2018 has been flat but fiscal year 2019 is expected to see double digit growth. The government initiatives and pharma company growth rate has been impressive this year.
Comparing Differences of Pharmaceuticals Industry Growth Rate 2018 with Previous Years
Post-GST has been a roller coaster for all the pharma people. The negative growth impacted the industry severely but after 10 months of tribulations the scenario seems to be a good position. Last maximum monthly growth rate was witnessed back in November 2016 at 14.2%. In May 2018 the pharma market has witnessed a double digit monthly growth.
- As per All India Organization of Chemists and Druggists (AIOCD), the growth rate was 10.8% this May’ 2018. The growth can indicated with sales growth from Rs 9,549 crore (May’ 2017) to Rs 10,583 crore this year.
- The fiscal 2019 is expected to witness a rise of 11-12% on-year in regards to pharmaceutical exports.
- Growth rate of 9.5% yoy in March 2018 in comparison to 7.1% yoy growth in February 2018 was a good achievement post GST. In March 2018, the total sales reported were Rs10, 029 crore.
- The MNC companies saw a double digit growth of 11.2% yoy in March 2018 whereas the domestic Indian counterparts grew at 9.1% yoy. The pricing caps on the Nation list of Essential medicines have played a key role in controlling the price and dominance of companies over price rates.
- In 2018, Number of pharma companies are establishing their business by offering the PCD pharma franchise business opportunity in all the states of India. Like Maksun Biotech is well-known Pharmaceutical company which stated the business in 2010. Now Company is expending their business by providing PCD Pharma franchise business opportunity in all India.
Impact on Different Pharma Sectors and Markets
Pharma sales shortly after demonetization negatively affected the pharma sales industry and GST affected severely. The new tax regime tumbled the industry’s peak growth from 13%-14% to 6%-7%. This resulted in fall in bulk purchases and significant reduction of inventories with chemists and stockiest. Since then the growth has been a negative and slow. The mid 2018 has been a recovering year as double digit growth is here to be embraced. Different segments of the pharmaceuticals industry saw a good growth in May 2018.
- Respiratory segment (15.4%)
- Dermatology registered (14.4%)
- Central nervous system (11.2%)
- Cardio segment (13%)
- Major chronic therapy like anti-diabetes etc (14.1%)
Growth witnessed in March 2018 year has been a well deserving as industry is picking up good growth. Here is an overall growth rate witnessed in recent few years that lead to the achievement in mid 2018.
- Respiratory drugs (20.1%)
- GI (9.8%)
- Pain management and analgesics (10.2%)
- Anti-diabetics & Neuro/CNS 7.8% each
- Cardiovascular Segment (7.1%)
- Anti-infective (10.7%)