Indian Pharmaceutical
Industry
An Overview
By Prof. (Dr.) Anil Kr. Sharma
[Link]., P.G.D.B.M., M.G.B.M.
Ph.D (Pharmacy)
Director : Parul Institute of Pharmacy
Scope :-
• Manufacture for marketing of Bulk Drugs (API) and
their value additions (Processed) Formulations,
preparations, extracts and applicable equipments
(sprays/inhalers) or appliances with reference to :-
• Medicine (Curative)
• Nutrition / Dietary Supplements
• Cosmetics
• Health Products (Preventive)
• Alternative Trends
Products under Pharmaceuticals
are
either
1) Over the Counter (OTC) Products
OR
2) Prescription Products
AND
EITHER
• GENERIC (PHARMACOPOEIAL) PRODUCTS
OR
• GENERIC UNDER BRAND NAME PRODUCTS
OR
• PATENT / PROPRIETORY PRODUCTS
OPPORTUNITIES AND THREATS
Though remains one of the most
profitable and stable
industry several macro level
variables are influencing
fundamental changes in the
industry scheme.
THREATS
• Substitute Generic Pharmaceutical threat.
• New Entrants – Bio Pharmaceuticals and Genomes.
• Increasing Buyer Power :-
a) Third Party
b) Governments Buyer
c) Health Maintenance Organization.
• Stringent Regulatory Environments.
• Declining R & D Productivity.
• Worldwide Compliance of
General Agreements on Traffics and Trade (GATT)
Trade Related Intellectual Property RIGHTS (TRIPS)
• Emergence of E-Pharmaceuticals.
– Economic Recession
WORLD MARKET SIZE
• Contributes total revenue of about US $ 500 Billion in 2007.
• Consistent strong growth 7 to 9%.
• Growth is proportionate to the
Change in disease profile.
Increasing Life style related disease.
Health Awareness.
• North America remains largest market (by revenue) about 49%
followed by Europe and Asia Pacific.
• Smaller market in Asia Pacific and Latin America are expected
to grow significantly.
Global Pharmaceutical Industry
Global Pharma sales by region
Region 2003 Sales($) %Global sales ($) % Growth
(Constant $)
North America 245 49 11
European union 125 25 8
Rest of Europe 15 3 14
Japan 55 11 3
Asia, Africa and Australia 40 8 12
Latin America 20 4 6
Total 500 100 9
Global Pharmaceutical Industry
R e g io n w ise g lo b al p h arm a sale s (U S $
8%
500 b illio n ) - 2007
11% 4%
3% 49%
25%
N o rth A m e ric a E u ro p e a n u n io n
R e s t o f E u ro p e Ja p a n
A s ia , A fric a a n d A u s traLlia
a tin A m e ric a
Trends in Global Pharmaceutical
Industry
Growing importance of generics
– Generics will be a fast-growing segment in regulated markets
– With USD 10 billion (retail) worth of drugs going off-patent each year on
average, generics represent a major opportunity for India
– High quality, cost-competitive API and formulations are vital for growth of
generics industry
– Managed healthcare driving down healthcare costs, boosting generics
Increasing need for new drug pipeline
– Big pharma companies under great pressure to enhance NCE pipeline
– Focus on extending patent life through novel drug delivery systems and
therapeutic switch
– Major potential to select Indian firms to support drug discovery
Consequent structural changes
– Generics outsourcing
– R&D outsourcing
Indian Pharmaceutical Industry
• The Indian pharmaceutical industry is US$ 7 billion in
size (Domestic – US$ 4.5 billion and Exports – US$ 2.5
billion)
• The Indian pharmaceutical industry is led by Indian
companies known for their chemistry skills and
companies with domestic brand equity
• The patent regime enabled Indian pharma players
achieve dominance in new product introductions
utilising the chemistry skills
• With the impending introduction of product patent
regime, select Indian pharma players are now
positioning themselves in regulated generics and
drug discovery space
• About 10000 registered manufacturing units but only
first 100 units have turnover around INR about 60 Cr.
out of total market size of about INR 32400 Cr.
High pric e c ontrols
Indian Pharmaceutical Industry
In d ian M arket E vo lu tio n
E arly P has e M id P has e Rec ent P has e
(1950-75) (1975-2000) (2000-)
S m all S c ale Units M edium / Large S c ale UnitsE m ergenc e of Indian origin
M NCs
M ark et Dom inated by M NCsG rowing s hare of Indian G lobal s c ale of operations of
entities Indian pharm ac os
M anufac ture of bulk (largely M anufac ture and m ark etingF orm
of ulations / G eneric s for
public s ec tor) and im port of bulk drugs and form ulationsthe world m ark et
form ulations
Inward outlook for m ark ets P rim arily dom es tic S trong ex port foc us ,
orientation, nom inal ex portdom es tic c ons olidations .
pres enc e Inc reas ingly high level of R& D
orientation
Lim ited IP R P rotec tion Lim ited IP R protec tion M oves towards IP R protec tion
pos t 2005
High P ric e Controls High P ric e Controls Reduc ing pric e c ontrols
Indian Pharmaceutical Industry
V a lu e G ro w th
Sl No P ro d u c t C a te g o ry % S h a re
(U S D M n )R a te (%)
1 G a s t ro In te s tin e Tra c t 1 ,1 2 4 .8 6 .3 2 4 .8 %
2 A n tib io tic s a n d A n ti B a c te ria ls 8 7 5 .0 3 .9 1 9 .3 %
3 A s th m a tic s 4 6 3 .7 9 .0 1 0 .2 %
4 C a rd io V a s c u la r S y s te m 4 4 1 .0 1 4 .9 9 .7 %
5 P a in M a n a g e m e n t 3 5 4 .8 5 .3 7 .8 %
6 C e n tra l N e rvo u s S y s te m 3 1 5 .6 9 .3 7 .0 %
7 D e rm a to lo g ic a ls 2 4 5 .4 6 .7 5 .4 %
8 B lo o d p ro d u c ts 1 7 5 .2 8 .0 3 .9 %
9 G y n a e c o lo g y 1 4 5 .5 4 .4 3 .2 %
1 0 O th e rs 3 9 3 .4 7 .4 9 .4 %
T o ta l 4 ,5 3 4 .3 7 .3 1 0 0 .0 %
Market Growth in IPM
INDIAN PHARMACEUTICAL Market is
growing continuously in India, majority due to:
Growing population @ 2% Approx.
Expanding middle class.
Rise of Diseases.
Rise in Intellectuality.
Rise in Indian MNC’s sectors- like Ranbaxy, Dr.
Reddy’s Lab, Cipla, Zydus etc.
Medical Tourism.
Emerging Health Insurance
Growth of Telemedicine.
AN OVERVIEW
• INDIA IS RANKED 15TH IN TERMS OF VALUE and 4th IN TERMS OF
VOLUME IN THE GLOBAL PHARMA MARKET
– HIGH POPULATION
– GROWING ROBUST ECONOMY
SLATES INDIA AS A KEY PLAYER ON THE GLOBAL SCENE
BENCHMERKS :-
– ACCEPTANCE OF PRODUCT PATENTS.
– INDIA HAS THE SECOND HIGHEST FDA MANUFACTURING UNITS,
SECOND ONLY TO USA
• PAVES WAY TO INCREASED RESEARCH & INNOVATION
• LAUNCH OF NEW PATENTED PRODUCTS
• LEADS TO FURTHER GROWTH
GROWTH MATRIX
PERFORMANCE MATRIX
multiply by 4.5 for fig in mil$
multiply by 4.5 for fig in mil$
multiply by 4.5 for fig in mil$
THE GUIDING STARS
Factors driving the Indian
Pharmaceutical Industry Generic Exports & API Outsourcing
Indian Pharmaceutical
Market Overview India is well positioned to target generic exports and
API outsourcing opportunities in the regulated markets
Skilled work force with strong chemistry skills
Approximately US$7 bn in 2007 with Significant and sustainable cost advantage over
Growth Opportunities
exports accounting for an additional international peers
US$ 2.5 bn Good understanding of the regulatory framework
• Amongst top 4 markets by volume • India has largest number of US FDA approved
globally plants outside the US
Strong branded generics market • Largest number of DMF filings outside US
Market growing at a rate 6%-8% as a • Indian companies are among the leading players
result of growing awareness, increasing participating in Para IV challenges
penetration & increasing affordability
• Emerging segments such as CNS, R&D Outsourcing
diabetes etc. growing at 15-20% +
Introduction of product patents in India Skilled work force at competitive costs
in 2005 are expected to lead to a Significant progress in development of pharma & R&D
greater emphasis on drug discovery infrastructure over last 5 years
and development Focus on early stage processes for NCEs, NDDS,
clinical trials, process re-engineering and dedicated
manufacturing
A combination of strong chemistry skills, regulatory capabilities and quality manufacturing has
5 positioned India favorably to capitalize on the global pharmaceutical opportunity
TO SUMMARISE…..
Indian Pharma Market had bounced back in 06.
Both acute & chronic therapies have witnessed double digit growth.
The indicators point towards robust growth in all the areas
Pharma companies are laying down their own success path with focus on their
core competence
Companies accordingly bank on different business models like
portfolio diversification
price premium
price cuts
regional penetration
therapy focus
encash brand equity
And the success has been achieved by setting their own benchmarks and trying
to raise their performance bars themselves.
This representation of the Indian
Pharmaceutical Industry reveals that…..
Indian Pharma Companies adopt and implement various long term
and short term strategies, however the strategy that leads the
peak of success, is the right strategy.
Apart from the predictable marketing and sales efforts of
companies, many times it is uncontrolled market dynamics,
intuition and likeability that drive the result of these efforts.
The perfect combination of all these through all the environmental
highs and lows wades the path for an
INDIAN PHARMACEUTICAL INDUCTRY
to become successful benchmark
IT ALSO REVEALS THAT…
THERE IS AN IMMENSE TIE UP (TRADE)
OPPORTUNITY
WITH INDIAN PHARMACEUTICAL INDUSTRY.
In fact we as an industry are already at the various stages
of discussions for strategic alliances with various companies
at global level.
Specifically for Hong Kong it serves as our South East Asia
touch Point, it could also serve as an ideal Corporate base
for the organizations.
China is for the Pharma industry a sourcing point, and in
near future will become much more than just a bulk supplier
due to the simple fact that nobody wants one time business
partner, the industry everywhere is looking for long haul, a
rapport for a long term relations.
Advantage India
• Competent workforce
• Cost effective industry
• Legal & Financial Framework
• Information Technology
• Globalization
• Consolidation
Challenges
• Lack of Product Patent
Protection
• Low R & D Budgets
• Limitation of
Technology Sources
• Decline Braindrain
• Inadequate Profit base
• Government Policies
FORECAST
1. Indian Pharmaceutical
Industry to cross US $ 15
Billion by 2015.
2. Market for patented
drugs in India to cross
US $ 5 Billion by 2015.
3. Market for generic drugs
in India to cross US $ 10
Billion by 2015.
PROSPECTIVES
• New Chemical
Entities
• Novel Drug Delivery
System
• Market Expansion
• Contract Manufacture
• Quality Validation
and Accreditation
