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Indian Pharma Industry Update

The Indian pharmaceutical industry is the third largest in the world by volume and valued at $4.5 billion, growing annually by 8-9%. It is highly fragmented with over 20,000 registered units, including 250 large companies that control 70% of the market. The industry supplies 70% of India's drug demands and produces formulations as well as 350 bulk drugs. While price competition is intense, the market is projected to reach $70 billion by 2020.

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52 views

Indian Pharma Industry Update

The Indian pharmaceutical industry is the third largest in the world by volume and valued at $4.5 billion, growing annually by 8-9%. It is highly fragmented with over 20,000 registered units, including 250 large companies that control 70% of the market. The industry supplies 70% of India's drug demands and produces formulations as well as 350 bulk drugs. While price competition is intense, the market is projected to reach $70 billion by 2020.

Uploaded by

Shikha Pubbi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Indian Pharma Industry Update

 Indian Pharma Industry is estimated to be worth $ 4.5 billion growing @ 8 to 9 % annually


 India's pharmaceutical industry is now the third largest in the world in terms of volume & ranks
14th in terms of value.
 A highly organized sector with more than 20,000 registered units
 The leading 250 pharmaceutical companies (large units) control 70% of the market with market
leader holding nearly 7% of the market share and the rest about 8000 Small Scale Units
 These units produce the complete range of pharmaceutical formulations and about 350 bulk
drugs
 Severe price competition and government price control.
 Our pharma market has the further potential to reach US$ 70 billion by 2020 - by McKinsey &
Company
 The sale of all types of pharmaceutical drugs and medicines in the country stands at US$ 9.61
billion, which is expected to reach around US$ 19.22 billion by 2012. – E & Y
Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities
in USA and UK. International companies associated with this sector have stimulated, assisted and
spearheaded this dynamic development in the past 53 years and helped to put India on the
pharmaceutical map of the world.

The domestic market was worth US$ 12.26 billion. This was reported by the Department of
Pharmaceuticals, Ministry of Chemicals and Fertilizer

,,

The Indian Pharmaceutical sector is highly fragmented. It has expanded drastically in the last two
decades.. It is an extremely fragmented market with The pharmaceutical industry in India meets around
70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations,
chemicals, tablets, capsules, orals and injectibles.

There are about 250 large units and about 8000 Small Scale Units, which form the core of the
pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the
complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and
about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of
pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and
pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly
approved by the Drug Control Authority.

Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of
production, low R&D costs, innovative scientific manpower, strength of national laboratories and an
increasing balance of trade.

Segmentation : The “organized” sector of India's pharmaceutical industry consists of 250 to 300
companies, which account for 70 percent of products on the market, with the top 10 firms representing
30 percent. However, the total sector is estimated at nearly 20,000 businesses, some of which are
extremely small. Approximately 75 percent of India's demand for medicines is met by local
manufacturing.

Background: The first pharmaceutical company are Bengal Chemicals and Pharmaceutical Works, which
still exists today as one of 5 government-owned drug manufacturers, appeared in Calcutta in 1930. For
the next 60 years, most of the drugs in India were imported by multinationals either in fully formulated
or bulk form. The government started to encourage the growth of drug manufacturing by Indian
companies in the early 1960s, and with the Patents Act in 1970, enabled the industry to become what it
is today.

Contract Manufacturing

The global pharmaceutical market is estimated to represent a $48 billion opportunity for

India by 2007, in terms of:

• manufacturing outsourcing-supply of active pharmaceutical ingredients (APIs) and intermediates

• development outsourcing-conducting preclinical and clinical trials

• customized chemistry services-contract research services for compounds pre-launch

Contract Research

Ajay Piramal, chairman and managing director of Nicholas Piramal, expects to see significant growth in
India's custom manufacturing business, as a result of high and rising costs to innovative manufacturers
in Europe and the U.S., and also forecasts that there will be a growing number of collaborations
between Indian and foreign firms in the domestic market, especially involving the biotechnology sector,
in a wide variety of areas such as collaborative R&D (including drug discovery and clinical trials), co-
marketing and manufacturing.

India and China's drug outsourcing discovery markets combined are currently worth around $7.3 billion
and, driven by government initiatives to diversify the drug discovery portfolio and develop
infrastructure, are set to reach $19.8 billion in 2011, say analysts at Frost & Sullivan.

Pricing Issues

The prices of 74 bulk drugs and their formulations, which account for around 40 percent of the retail
pharmaceutical market, are controlled by the Drug Price Control Order (DPCO) of 1995. The
government's 2002 Pharmaceutical Policy would have reduced the numbers of price-controlled drugs
still further, but this proposal is currently under judicial review in the Supreme Court. If it is approved,
the number of price-controlled drugs is expected to drop to 25.

INDIAN PHARMA CO.s

 Research and development has always taken the back seat amongst Indian pharmaceutical
companies
 Core competencies will play an important role in determining the future of many Indian
pharmaceutical companies in the post product-patent regime after 2005.
 The Indian pharmaceutical industry also needs to take advantage of the recent advances in
biotechnology and information technology

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