The domestic pharmaceuticals business had crept up on the economic slowdown as it reported an INR72,000 crore loss. This business was once demmed as recession proof. Overall, after reporting its first negative growth last September, the market declined by 1.8%.
The report comes after the market had reported its lowest growth in the past six years, 1.1% for August. The products covered under the drug pricing control market have declined by 14% for September while the rest of the pharmaceutical market grew by just 0.4%.
The rate caps were announced by the government but this accounts only for less than 15% of the market. According to market research firm AIOCD Awacs, September would be noted as the month the domestic drug market contracted. This despite the fact that the drug industry had seen growth of between 12% and 13% in the past three to four years. Demand then began to slow down in January and since then growth had been on a standstill range of between 4% and 9.9%.
Another factor that had pulled down the drug market's growth are the disruptions in the trade channels as stockists and retailer in the Indian states have entered into negotiations between pharmaceutical firms in order to protect their margins.
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