Demonetisation of notes and Indian pharmaceutical industry

  • Posted on: 3 April 2017
  • By: admin

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After the demonetisation of 500 and 1000 rupees notes, numerous sectors are being affected and hopefully we all have been affected with that. Also Global banks and rating agencies have downgraded India’s growth in the wake of demonetisation of high level. Current year’s GDP rate has been slowed down to 6.5. But Pharmaceutical industries are growing with good margin. Even shares of pharmaceutical industries are rating higher.

There are numbers of factors which lead pharmaceutical industries in this economical slow down. We will discuss few of them.

Many indigenous pharmaceutical industries are exporting bulk of medicines in US, UK, Canada, Australia, other parts of Europe and rest of the world. Pharma giants like Sun Pharma, Lupin, Aurobindo Pharma, Dr. Reddy’s Lab etc. are growing marginally.

During this period of demonetisation, Indian companies are continued to receive FDA approvals, grown with acquisitions, share divestion etc.

Lupin is the market leader in 42 products marketed in the US generics market and is among the top three by market share in 79 products. Dr. Reddy’s Lab has the strongest pipeline with 85 ANDAs are pending approval. Lupin received tentative approval for generic Epzicom® Tablets in US. Sun Pharma acquired Biosintez in Russia. Cipla EU divested stakes in Chase Pharmaceuticals to Allergan. Arrow Generiques SAS, the French subsidiary of Aurobindo Pharma Ltd, acquired products in France from Teva. Zydus received final approval from the USFDA for metronidazole tables.

As government demonetized 500 and 1000 rupees notes, people dealing with hospitals or medicines had started getting difficulties. So government has given permission to private hospitals and pharmacies to accept old notes. Though there are some news that hospitals are refusing to accept old notes. This helped at some extent for pharmaceutical industries.


Some part of consumers also switched to ordering medicines through online pharmacies like PharmEasy and 1mg. It is being come in picture that retailers and stockiest did not register any drop in sales but online pharmacies are getting a sales hike of 10-20%, with many consumers stocking up for a month or so, and preponing their medicine purchase. This could also be attributed to the fact that consumers were allowed to buy drugs with banned Rs 500 and Rs 1,000 notes against a prescription. The currencies could also be used at retail stores, as well for cash-on-delivery in online orders, reported by Time of India.

Even 1mg announced that they will accept old Rs 500 notes for medicine delivered on or before 15th December, 2016. Old Rs 1000 notes will not be accepted.

Overall, Pharmaceutical sector is working fine even with lesser GDP. Also MNCs are seems unaffected with demonetisation. Watch out for some recent changes or rules and behavior of Pharmaceutical industry.