Pharma exports to Latin America likely to be muted

Mumbai: Pharmaceuticals exports to Latin American countries are likely to be “muted” and for CIS countries, the exports is expected to “improve but very weakly”, an official of India Ratings & Research said on Wednesday.

“..our outlook is that as far as the LATAM (Latin America) market, it continues to be muted and as far the CIS (Commonwealth of Independent States) countries, it is expected to improve but very weakly,” Ankit Bhembre of India Ratings & Research told BTVi in an interview.

He said Venezuela has been much of a concern for last two to three years.

“Exporters are reducing their exposure to Venezuela,” he said, adding that some markets including Chile and Columbia with low amount of generic drugs penetrations provide opportunities.

“In terms of Russia, currency has been volatile, although there were some currency gains. Exports have slightly improved,” he said.

“In the African markets, particularly the institutional markets, there have been couple of lower tenders for anti-malarial and anti-HIV for the last quarter of FY17 and first quarter of FY18. These caused a reduction in exports revenues,” he said.

Weak economic and political conditions in Africa and currency volatility in Latin America (LATAM) are likely to weigh on the consumption of pharmaceutical formulations and therefore pressure medium term growth prospects for India’s exporters, the agency said.

It also said in FY17, India’s exports of pharmaceutical formulations or finished products to the semi-regulated markets grew at the weakest pace of 0.7 per cent in the last seven years.

Bhembre, however, said moderate growth in exports to Asia and the Middle East for the near to medium term is expected.

Despite the export underperformance in FY17, the long-term underlying fundamentals of the semi-regulated markets remain intact. In the underdeveloped Africa, Latin America and Asia economies, the latent demand for the treatment of chronic diseases will boost generics uptake due to limited budgets and high out-of-pocket expenditure, he said.

Increasing drive for universal healthcare insurance in developing Asian markets and GCC countries is also likely to boost generics uptake and benefit generics players over the medium to long term, he added.