The astounding growth of pharmaceutical industry
Pharmaceutical industry is not only one of the most rapidly developing industries of India; it is third largest in the world, as far as volumes are concerned. The total turnover of this industry in India is around US$25 billion, out of which the domestic market is around US$15 billion. In the next five years, it is expected to grow at a rate of 14 to 17%. As far as emerging pharmaceutical markets in the world are concerned, India is among the top five.
Capitalizing on reverse engineering
One major reason why multinational companies are not attracted towards Indian market is its lack of patent protection. While, Indian pharmaceutical companies mastered the art of reverse engineering latest processes to produce drugs at extremely low price, and it helped them to have their foothold in both domestic and international markets. Though innovation is a new concept, and only a few big companies are doing this, the rest of the pharmaceutical industry in India is following the business model of reverse engineering.
The recession proof industry
Pharmaceutical industry in India has maintained a growth rate of 17%, even during the global slowdown, and it generated Rs. 140 billion in revenues in 2010 alone. The different segments of this industry are bio-pharma, bio-services, and bio-agri. In India, at present, there are around 5000 manufacturing companies in the pharmaceutical sector and around 3.5 lakh workers are employed in it.
Factors leading to the growth
Both healthcare and pharmaceutical sectors in India are developing rapidly and are supported by the aging populations. Latest research and development activities in this field are also responsible for an unexpected growth and resulted benefits to the consumers.
Because of rapidly changing market conditions, there is no dearth of “mergers and acquisitions” activities in this sector and in the future, it would be even more prominent. The healthcare industry in India is developing so rapidly that it is expected to achieve US$250 billion mark by 2020, if the current trends continue. Similarly, pharmaceutical industry in India is expected to gain US$75 billion in sales by the same year. At present this figure is just US$15 billion. The major drug categories that are driving the market include derma, vitamins and anti-diabetics.
India is known to offer the best treatment at affordable prices, if we compare it with countries like US and UK, where the cost of healthcare is extremely high. That’s the reason medical tourism in India is increasing at an astounding rate of 25% per annum and the financial value of it is estimated to be around US$2.5 billion.
The major players
Pharmaceutical industry in India comprises of two major categories– domestic manufacturers and multinational companies. The major brands in Indian pharmaceutical industry are Ranbaxy, Cipla, Pfizer, Lupin, Dr. Reddy’s laboratories, Cadila, Wockhardt, Sun Pharmaceuticals, Torrent, Abott and Glaxo SmithKline Beecham, etc.
Indian pharmaceutical industry is coming out of its notorious image of reverse engineering and patent violation to becoming the international hub of pharmaceutical production and research. At present, Indian generic drugs make up for around one fifth of total international generic drug supplies. India is the leading exporter of generic drugs in the world with an export turnover of US$11 billion. Patent protected products comprise of just 10% of the overall market, while generic drugs dominate. Multinational companies and drug manufacturers in India are also experiencing tremendous growth. Around 50% of leading medicine brands in India comprise of international drug manufacturers such as Novartis, Pfizer, and GSK, etc., in terms of sales.
The future outlook
To sum up, advanced technology, the best talent pool, compliance, PLC management, R&D, quality assurance, intellectual property rights, and improved marketing and sales strategies will fuel further growth in this industry, in India. The robust growth in this industry will also create hundreds of thousands of jobs.
Indian Pharma Industry