Indian Pharma increasing capital and research spending

With over $50 billion worth of drugs set to go off patent over the next two years in the USA, Indian pharmaceutical companies are stepping up to the plate, loosening their purse strings and spending more on capital expenditure (capex), reports The Pharma Letter’s India correspondent.

Though Indian companies continue to be skittish about any scrutiny undertaken by the US Food and Drug Administration, they are likely to invest more over the next four years to comply with the strict norms set by the US regulator. The enhanced capex would also hold them in good stead when they target drugs going off patent on cancer, multiple sclerosis and even rheumatoid arthritis.

A report by Crisil Ratings, a credit rating agency, has noted that the capex of India's top 20 drug companies is set to increase by 40% to more than $8.2 billion by fiscal 2018. The enhanced expenditure translates into an average capex of $2 billion annually, compared to $1.4 billion in each company, over the last four years. These top 20 Indian drug companies contribute two thirds of the country’s drug exports.