US margins under stress, Indian drug makers get booster dose in Europe

While the North American market may have dragged margins of the Indian pharmaceutical sector in 2017-18, most of the large caps seem to have done well in terms of growth in Europe. Aurobindo Pharma, for example, led the pack with a 33 per cent year-on-year (YoY) rise in EU sales, followed by Glenmark (27.55 per cent), Lupin (11.2 per cent), among others. Europe is the third-largest market for Indian drug makers, after the US and Africa. IQVIA data shows that at $35 billion, the European generics market is the world's second largest by value, after the US. For some players such as Torrent Pharma, sales from Europe almost equalled the the revenues from the US market. Analysts pointed out that the robust growth in Europe business of Aurbindo in 2017-18 is partly because of the fact that it benefited from the absence of a major player in the tendering process last year. Aurobindo had made some acquisitions in Europe (Generis Farmaceutica S.A. in Portugal in 2017 and the generic operations of Actavis in 2014) that have helped the company to boost its sales in the continent. "The company as such has done well in Europe. Even if one takes out the sales from the acquired companies, Aurobindo's Europe growth would still be at around 15-18 per cent," said Amey Chalke, analyst with HDFC Securities.