The Fight Is On

India’s pharmaceutical industry is going through a tumultuous phase. Dilip Shanghvi’s shrinking net worth is one of the proofs of emerging challenges in the drug market. Once India’s richest person, he slipped to eighth position  against fifth in BW ’s Super Rich List last year.  

While his wealth hasn’t shrunk, it hasn’t gained much as well. His net worth in 2016 stood at Rs 92,393 crore. However, it registered a jump of just 1 per cent to Rs 93,461 crore in 2017.

Started as a two-man operation, Sun Pharma now employs 14,000 people. The founder and head of Sun Pharmaceutical Industries, Shanghvi has seen his net worth fall to $12.8 billion on the Bloomberg Billionaires Index in January against $13.1 billion in 2017.

In 2015, with a net worth of $21.7 billion, Shanghvi overtook Mukesh Ambani in the billionaire rankings. However, in April 2015, his wealth tumbled by around 57 per cent from its all-time high. The recovery wasn’t easy due to the price erosion of generics in company’s largest market, US. Also, US health watchdog, FDA, has come down heavily on the company in the inspection of approved plants.

Now, Sun is one of the several domestic generic drug makers facing a string of actions taken by the US FDA. For Instance, Sun Pharma’s plant in Halol, Gujarat, did not match FDA’s expectations. The Caraco Pharmaceutical plant owned by Sun Pharma in Detroit also faced similar issues with the FDA stating that its drug making processes were not hygienic. In between, FDA sanctioned new generics in US market, which came as an opportunity for its competitors to fill these orders and gain market share. Several factors led to the fall in Sun Pharma’s sales figures of about 7 per cent in the first quarter of 2017. “There is a new normal that is getting established,” Shanghvi said over the conference call post result declaration.