Domestic pharmaceutical industry is expected to witness a revenue growth of 6-8 per cent in the next fiscal, rating agency Icra said on Thursday. Despite several disruptive events, the Indian pharmaceutical market (IPM) witnessed a healthy CAGR of 10.9 per cent between FY2012 and FY2022.

“Going forward, ICRA expects revenues for its sample set to increase by 6-8 per cent in FY2024 against 3-4 per cent growth in FY2023,” Icra Assistant Vice President & Sector Head – Corporate Ratings Mythri Macherla said in a statement.

Structural factors such as ageing population and continued rise in lifestyle/chronic diseases, in addition to WPI-linked price hikes for NLEM products, new product introductions, and annual price hikes for non-NLEM products, are expected to support revenue growth for the industry, she added.

Since FY2018, IPM growth has largely been supported by price increases and new product introductions, even as volume growth remained between 2-3 per cent each fiscal, Macherla said.

Higher sales of anti-infectives, further supported by price increases taken to offset raw material cost inflation, aided the overall IPM growth of 14.6 per cent in FY2022, she added.

However, given the high base, the volume contracted by 1.2 per cent for the nine-month period of FY2023, Icra said.

The steps being taken by the companies towards new product introductions and enhancements in field force are expected to support their growth going forward, it added. Icra noted that drugs listed under National List of Essential Medicines (NLEM) accounted for 17-18 per cent of the IPM, with some companies deriving around 30 per cent of their revenues from such medications.

In terms of emerging trends in the industry, e-pharmacies have gained significant traction in recent years and now account for 10-15 per cent of the IPM currently, it added.