Mumbai, May 28: The pharma industry, under the constant glare of the US drug regulator, has to contend now with pricing pressures in the American market.

From Sun Pharma and Lupin to Glenmark, Dr Reddy's and the others, price erosion in generic drugs has been a common anguish as they declared their results for the fourth quarter ended March 31. For some of these companies, more than 40 per cent of their revenues come from the US market.

The developments have come at a time new launches in the US - at least for some of them - have taken a hit because of regulatory action.

Pricing pressure in generics is not new, but this has exacerbated in recent times, with experts warning of further deterioration.

Industry finds the rate of price fall, earlier in low single-digits has now become high single-digit. Some experts say the decline could even touch double-digit in the current fiscal.

The development has not been lost to the stock markets. At a time the Sensex has scaled 31000, investors have shunned pharma stocks usually considered as a defensive play. So far this calendar year, the BSE Healthcare index has dropped more than 8 per cent, while the benchmark Sensex has risen around 17 per cent.

At a conference call on Friday after its disappointing fourth-quarter results because of falling growth in the US, Dilip Shanghvi, managing director of Sun Pharma, said the nature of the US generic market is changing rapidly, with increased competitive intensity and customer consolidation creating pressure on pricing.

"A new normal is getting established, the value of even the first-to-file products during exclusivity is likely to go down, that is the new normal," he said.

The interim CEO of Sun Pharma's subsidiary Taro Pharmaceutical Industries, Abhay Gandhi, also acknowledged the hurdles before the entire generic sector.

Observers said a few factors contributed to the pricing pressures.

The US regulator is approving more drugs leading to more competition and lowering prices. In 2016, the USFDA approved 630 abbreviated new drug applications (ANDAs), the highest number of generic drug approvals. ANDA put simply is an application to market a generic drug.

This apart, there have been new entrants to the US market from outside the traditional geographies. According to a recent report from CLSA, these entrants now account for 30 per cent of the approvals.

Besides, there is the consolidation among distributors which has enabled them to have a better bargaining power with the drug makers.