Navigating Challenges in the US Pharma Market: Insights from InCred AMC

The pharmaceutical industry, particularly in the United States, is undergoing significant shifts, posing challenges for companies striving to maintain profitability. Aditya Khemka, manager of Healthcare at InCred PMS, sheds light on these dynamics in a recent CNBC TV18 interview, emphasizing the complexities surrounding compliance issues and market dynamics.

Navigating Compliance Challenges

Khemka highlights the persistent compliance issues faced by Indian pharmaceutical companies operating in the US market. Despite their longstanding presence, compliance with FDA standards remains a daunting task. While significant progress has been made, Khemka acknowledges the necessity for continual vigilance and investment in compliance measures to align with evolving regulations.

Market Volatility and Structural Challenges

The discussion pivots to the broader market landscape, with Khemka noting the structural difficulties inherent in the US pharmaceutical market. He points out that many pharma stocks are trading at historically high price-to-earnings (PE) multiples, driven partly by one-off opportunities such as new product launches. However, once these opportunities diminish, sustaining profitability becomes increasingly challenging amidst ongoing price corrections and competitive pressures.

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Identifying Investment Opportunities Pharma Sector

Despite the challenges, Khemka identifies potential investment avenues within the pharmaceutical sector, particularly in mid and small-cap companies. These firms, characterized by sustainable business models and attractive valuations, offer long-term growth prospects. Additionally, Khemka highlights the attractiveness of diagnostic companies, which are trading below historical average multiples and possess robust fundamentals.

Challenges in the US Pharma Market

Mitigating Risk through Diversification

To mitigate risk, companies have begun transferring key products to alternate sites. While this strategy helps ensure compliance, it also escalates costs, thereby impacting margins. Khemka emphasizes the need for a balanced approach, acknowledging that while compliance costs may rise, they are integral to operating in the challenging US market environment.

Market Insights and Future Prospects

The conversation extends to potential opportunities in emerging segments such as GLP-1 and semaglutide in the Indian market. While acknowledging the growth potential, Khemka underscores the importance of monitoring competitive intensity and first-mover advantages. Additionally, he cautions against overestimating the potential of hyped products, particularly in light of historical market trends favoring Indian pharmaceutical companies over multinational counterparts.


In the ever-evolving landscape of the pharmaceutical industry, navigating challenges requires a combination of compliance diligence, strategic investment decisions, and a keen understanding of market dynamics. Khemka’s insights offer valuable perspectives for investors and industry stakeholders alike, emphasizing the importance of adaptability and prudent risk management in achieving sustainable growth amidst market volatility.

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