ET Bureau Jan 22, 2020, 07.19 AM IST

MUMBAI: Rating agency Crisil has said the woes of Indian generic companies are likely to continue as the regulatory action by the US Food and Drug Administration (USFDA) will delay their product launches in the US markets. Crisil predicts 18% of launches by Indian companies will be delayed in the US.

The warning letter issued by USFDA to large pharma companies more than doubled in the first 10 months of 2019 compared with the previous year, CRISIL said, adding that close to 180 generic drug launches will be pushed out from their intended launch dates due to it.

"A substantial delay in resolution of regulatory issues and/or heightened scrutiny could derail the US growth story,” said Sameer Charania, director, Crisil Ratings. He added that growing regulatory action in the US could bring down the US growth of Indian companies to 10-11% from the current 16% in the next two years. Indian companies’ total sales from the US market is estimated to be ?55,000 crore. Over the last few years, Indian drug makers have diversified their portfolio towards complex generics in an attempt to insulate themselves from pricing pressure in the US. The complex generic pipeline of Indian generic makers stands at 25% and it is this that is expected to pump up sales numbers for companies.

Brokerage firm Jefferies, too, in its January report said approvals for Indian drug companies in Q32020 have remained muted. Crisil said a similar trend of slow approvals was seen in 2015, when the FDA intensified its scrutiny of Indian firms citing data integrity.