Ratings agency Icra on Wednesday said the Indian pharmaceutical industry is expected to grow around 10-12 percent between FY2019 and FY2022 while maintaining a stable outlook on the sector.

Icra cited abating headwinds from pricing pressure in the US (which is the largest regulated market), stable growth for the Indian market driven by increasing healthcare spending and better accessibility as likely key growth drivers for the Indian pharma companies, coupled with comfortable balance sheet structure.

It, however, said increased cost related to regulatory compliances, especially for the US market, price controls across markets and mandatory genericisation for Indian market remained key risks.

“The domestic pharmaceutical industry has gained adequate scale and generic drug development capabilities over a decade of growth which will keep them in good stead to capture bigger opportunities, especially in the specialty/niche segments in the regulated market,” Icra said in a statement.The FY2019-2022 compound annual growth rate (CAGR) is expected to be around 10-12 percent for domestic pharmaceutical companies, it added.

Icra said growth from the US picked up in FY2019 to 12.1 percent after seeing a decline of 13.1 percent in FY2018.

“The growth was supported by higher market share for Indian players as several generic MNC players optimised product portfolios along with new product launches,” it added.

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