Generics likely to dent pharma drug market

'70-111 bp annual hit expected from trade generics and Jan Aushadhi'

- SOHINI DAS

Rising penetration of trade generic medicines is eating into the value growth of the domestic pharmaceutical market, showed a recent analysis.

According to a Kotak Institutional Equities analysis, 70-111 basis points (bps) annual dent is expected from trade generics and Jan Aushadhi on Indian Pharma Market (IPM) growth at least until FY27-28 (see chart).

Trade generic medicines are those that are not pushed into the market through doctor promotions.

Rather, pharma companies supply these medicines directly to the distributors.

Typically, trade generic medicines are available at a 50-60 per cent discount to branded generic medicines as there is no marketing expense incurred.

The Centre is targeting to increase the Jan Aushadhi store count by 2.5 times to 25,000 in less than two and half years (end of FY26). As of November 2023, there are 10,006 Jan Aushadhi stores opened across 753 districts in the country. Around 33 per cent of the stores are now in South India, with a high skew towards Karnataka and Kerala. As such, UP has the highest number of Jan Aushadhi stores (1,481).