Financial Daily from THE HINDU group of publications
Tuesday, Jun 15, 2004
Industry & Economy - Pharmaceuticals
Pharma cos cash in on stress-related ailments
New Delhi , June 14
LIFE-STYLE related chronic ailments due to stress may be taking a toll on the present generation, but pushing drugs to tackle these ailments is a focus area for pharmaceutical companies. The segment, which mainly includes anti-diabetes, cardiac and neuro-psychiatry, provides a huge opportunity for them.
According to market estimates, the total size of the Indian pharmaceutical industry in 2003 was $4.8 billion, of which the chronic therapy segment accounted for 26 per cent, up from the previous year's 25 per cent. Internationally too, products in these segments have grown by over 10 per cent.
Mr V.K. Mehta, Joint Managing Director, Ind-Swift Ltd said, "This is one of the highest growing segments with the anti-diabetes segment growing by 30 per cent while the cardiology and cholesterol busting segment has been growing by 18-20 per cent."
Consider this. Dr Reddy's Ltd has completed Phase II trials of its insulin sensitiser, which has been licensed out to Novo Nordisk, besides working on another cholesterol reducing drug codenamed DRF 10945. Wockhardt has also launched a human insulin.
Biocon too is targeting the insulin segment and statins (lipid lowering agents) have become an important focus area for Ranbaxy Laboratories Ltd. Besides these, a host of companies such as Sun Pharmaceuticals, Torrent Pharmaceuticals, Cipla, Ind-Swift, Cadila Pharmaceuticals and other mid-cap corporates are bullish about the segment.
In fact, Ranbaxy Laboratories' annual report states that the launch of a specialised SBU for the cardiovascular and anti-diabetes segment has yielded positive results.
"Four brands - Strovas - a statin, Covance for hypertension, Piogla an anti-diabetic agent and Ceruvin to reduce risk of heart attacks or strokes - identified as key drivers of growth for 2003 showed strong growth and were primarily responsible for driving the divisional market shares," it said.
A Wockhardt official said that in the first quarter of the current year, the anti-diabetic product basket grew by 154 per cent over the same period last year.
A Sun Pharmaceutical official said that unlike antibiotics, these drugs have to be taken for long periods of time and therefore, there was a huge potential. Analysts tracking the sector added that the margins on these products depended on the product and the promotion as well as marketing spends.
"If companies are addressing a niche segment where the competition is less, the margins are higher. In a more competitive segment like hypertension, the margins are lower," said an analyst.
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