An overview
The Indian pharmaceutical industry is showing signs of healthy growth and is likely to be in the top 10 global markets by value by 2020. Major scientific and technological advances, coupled with socio-demographic changes as well as increasing demand for medicines will revive the pharma industry’s fortune in near future.
From an industry that depended completely on foreign investment a few decades ago, Indian pharmaceutical industry has come a long way to become an indigenous entrepreneur-driven industry today with around Rs 64,000 crore market, over 10,000 small & medium enterprises and about 300 large companies across the country. It provides employment to over 40 lakh people.
Moreover, pharmaceutical sector in India has contributed significantly to the improvement of standard of life, life expectancy, bringing down the death rate and infant mortality rates in the country. It has earned the respect & admiration across the globe for providing safe, efficacious, and affordable quality medicines.
India will join the league of top 10 global pharmaceutical markets in terms of sales by 2020 with the total value reaching $ 50 billion by then, according to a report by PricewaterhouseCoopers (PwC).
The demand for pharmaceutical products in India is significant and is driven by several factors like low drug penetration, rising middle-class & disposable income, increased government & private spending on healthcare, increasing medical insurance penetration, changing demographic pattern & rise in chronic lifestyle-related diseases, adoption of product patents, and aggressive market penetration driven by the relatively smaller companies.
The assessment of the Indian pharma sector
India’s pharmaceutical market grew at 15.7 per cent during December 2011. Globally, India ranks third in terms of manufacturing pharma products by volume. According to the recent McKinsey & Company’s report, the pharmaceutical market is ranked 14th in the world. The report further states, Indian pharmaceuticals market will grow to $ 55 billion in 2020; and if aggressive growth strategies are implemented, it has further potential to reach $ 70 billion by 2020.
As per the research conducted recently, following are the trends driving the growth of pharmaceutical industry in India:
· The demand for pharmaceutical products in India is significant and is driven by low drug penetration, rising middle-class & disposable income, increased government & private spending on healthcare, increasing medical insurance penetration etc
· By 2015 patent drugs worth $ 171 billion are estimated to go off-patent leading to a huge surge in generic products. India being one of the leading players in generics will have maximum share in generics business
· There has been an increase in exports by India to regulated markets especially the US, as Indian companies file the highest number of ANDA’s with US FDA leading to greater chances of approvals
· There are currently approximately 175 US FDA and nearly 90 UK-MHRA approved pharma manufacturing plants in India, which can supply high quality pharma products globally
· Increased outsourcing activities are further facilitating the growth in pharma export business
· Rising number of M&A activities involving Indian companies are set to consolidate the market, thereby widening geographic reach, strengthening distribution network and venturing into new therapeutic segments
· Biopharmaceuticals is another potential high growth segment for Indian pharma growing at double digit driven by the vaccines market
· Indian companies are entering into strategic tie-ups with MNCs to strengthen their product portfolio
· Companies are expanding their presence in rural markets
India tops the world in exporting generic medicines worth $ 11 billion. The Indian generic drug market is to grow at a CAGR of around 17 per cent in 12-13.
