Business Today

The US Squeeze

Margin erosion and regulatory hurdles are hitting Indian pharma companies hard in their biggest market.

The way India's largest drug maker Sun Pharmaceutical rose and fell in the US, a country that accounts for 44 per cent of the $1.1 trillion global drug market, is an indication of the challenges that the Indian pharmaceutical industry is facing in that market.

Sun entered the US in 2008/09 by acquiring Caraco and ramped up its business in the next few years, launching complex generics and coming up with many first to files (FTFs) to reap exclusive generic sales opportunities. In FY2010, Taro Pharmaceuticals was also acquired. Between 2006/07 and 2013/14, Sun Pharma's US sales grew steeply, from `500 crore to `9,800 crore. In 2014/15, it reached `13,700 crore, around 60 per cent of the firm's total revenue, even though the company acquired a trouble torn Ranbaxy. From then on, its sales growth in the US market went flat. Its US earnings fell to `13,500 crore in 2015/16 (50

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