As countries increasingly focus on affordable health care, the Indian pharmaceutical firms are well positioned for global growth, says a report by Global rating agency Standard & Poor’s (S&P).
The report titled “Indian Pharmaceutical Companies Have a Global Opportunity, If They Conquer Compliance Issues,” by S&P Ratings Services published today, however, said failure to comply with the stringent quality requirements in developed markets is a key factor.
““Expansion into developed markets, especially the U.S., is positive for the credit profiles of Indian pharmaceutical companies. The market’s size and the absence of price controls are likely to support the revenue growth and profitability,” Standard & Poor’s credit analyst Vishal Kulkarni said.
The growth prospects are particularly high for Indian companies in the speciality and complex generic drugs segment in the U.S., the report said.
However, failure on compliance with regulations could seriously hurt creditworthiness. It could lead to disruptions in production, import bans, remediation costs, and above all reputational and litigation risks, it added.
While the largest 10 Indian pharmaceutical companies are much smaller in terms of revenue than their global generics peers, they make up for it by their robust product pipeline, the report said.
“What the Indian companies lack in size is largely offset by their strong product pipeline, presence in emerging markets, and conservatively maintained financial health,” Kulkarni said in the report.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.