Record US drug shortage a positive for Indian pharma companies
Fractures in supply chain, compounded by stringent regulatory oversight, is causing ripples in generic drug manufacturers' production capacity in US, a report by IIFL Securities noted
- Apr 30, 2024,
- Updated Apr 30, 2024, 05:02 PM IST
In light of the elevated levels of active drug shortages in the United States, Indian pharmaceutical companies such as Aurobindo, Sun Pharmaceutical Industries, and Gland Pharma are projected to make significant strides, analysts from trading platform IIFL Securities have said.
Analysts Rahul Jeewani and Naman Bagrecha at IIFL Securities in a report said that the drug shortage, unseen since its peak in the third quarter of 2014, presents an opportune time for these enterprises. The number of drugs under short supply rocketed from 271 in the first quarter of 2021 to 323 in the same quarter of 2024--the highest tally since the American Society of Health-System Pharmacists began keeping a record in 2001.
The prevailing situation in the US pharmaceutical industry is largely due to fractures in the supply chain, compounded by stringent regulatory oversight, causing ripples in generic drug manufacturers' production capacity, the report noted. This disruption has forced global generic manufacturers to rethink their strategies and shift from commodity generics to complex ones while diversifying their portfolios, the report said.
Aurobindo Pharma, Sun Pharmaceutical Industries, and Gland Pharma, having the most exposure to products experiencing shortages in US markets, are projected to benefit the most. Aurobindo Pharma, with 36 products under shortage, leads the pack, followed by Sun Pharmaceutical Industries and Gland Pharma with 31 and 17 products, respectively.
Jeewani and Bagrecha recommend Aurobindo Pharma as the preferred choice among export-oriented generic manufacturers, given its expansive product pipeline across diverse pharmaceutical niches.
The Covid-19 pandemic has exacerbated the situation, triggering a surge in demand and subsequent restocking of drugs. A dramatic increase of 42% in US drug recalls (from 363 in 2022 to 517 in 2023) further fuels the shortage crisis.
While President Joe Biden's administration has proposed a roadmap to mend the market, Indian pharmaceutical companies must navigate their own challenges. These include increased plant inspections by the United States Food and Drug Administration (USFDA), causing supply chain disruptions, especially for Active Pharmaceutical Ingredients/Key Starting Materials supplies from China, the report said.
In light of the elevated levels of active drug shortages in the United States, Indian pharmaceutical companies such as Aurobindo, Sun Pharmaceutical Industries, and Gland Pharma are projected to make significant strides, analysts from trading platform IIFL Securities have said.
Analysts Rahul Jeewani and Naman Bagrecha at IIFL Securities in a report said that the drug shortage, unseen since its peak in the third quarter of 2014, presents an opportune time for these enterprises. The number of drugs under short supply rocketed from 271 in the first quarter of 2021 to 323 in the same quarter of 2024--the highest tally since the American Society of Health-System Pharmacists began keeping a record in 2001.
The prevailing situation in the US pharmaceutical industry is largely due to fractures in the supply chain, compounded by stringent regulatory oversight, causing ripples in generic drug manufacturers' production capacity, the report noted. This disruption has forced global generic manufacturers to rethink their strategies and shift from commodity generics to complex ones while diversifying their portfolios, the report said.
Aurobindo Pharma, Sun Pharmaceutical Industries, and Gland Pharma, having the most exposure to products experiencing shortages in US markets, are projected to benefit the most. Aurobindo Pharma, with 36 products under shortage, leads the pack, followed by Sun Pharmaceutical Industries and Gland Pharma with 31 and 17 products, respectively.
Jeewani and Bagrecha recommend Aurobindo Pharma as the preferred choice among export-oriented generic manufacturers, given its expansive product pipeline across diverse pharmaceutical niches.
The Covid-19 pandemic has exacerbated the situation, triggering a surge in demand and subsequent restocking of drugs. A dramatic increase of 42% in US drug recalls (from 363 in 2022 to 517 in 2023) further fuels the shortage crisis.
While President Joe Biden's administration has proposed a roadmap to mend the market, Indian pharmaceutical companies must navigate their own challenges. These include increased plant inspections by the United States Food and Drug Administration (USFDA), causing supply chain disruptions, especially for Active Pharmaceutical Ingredients/Key Starting Materials supplies from China, the report said.