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Overview of Pharmaceutical Sector

Accounting for two percent of the world's pharmaceutical market, the Indian pharmaceutical sector has an estimated market value of about US $8 billion. It's at 4th rank in terms of total pharmaceutical production and 13th in terms of value. It is growing at an average rate of 7.2 % and is expected to grow to US $ 12 billion by 2010.

Over the last two years the pharmaceutical market value has increased to about US $ 355 million because of the launch of new products. According to an estimate, 3900 new generic products have been launched in the past two years. These have been by and large launched by big brands in the pharma sector. And in the year 2005 Indian pharmaceutical companies captured around 70% of the domestic market.

As in the present scenario, only a few people can afford costly drugs, which have increased price sensitivity in the pharmaceutical market. Now the companies are trying to capture the market by introducing high quality and low price medicines and drugs.

With the Product Patent Act, which came into action in January 2005, this industry is able to attract big MNCs to India. Earlier these big firms had apprehensions in launching new drugs in the Indian market.

At present, a large number of Indian pharmaceuticals companies are looking for tie-ups with foreign firms for in-license drugs. GlaxoSmithKline is among the top choices for the firms that wish to launch their product in India, but do not have any branch over here.

Contract research and pharmaceutical outsourcing are the new avenues in the pharmaceutical market. Contract manufacturing is growing at a very fast pace and is estimated to grow to US $30billion, whereas contract research is estimated to reach US$6-10 billion.

Indian multinational companies like Dr.Reddy's Lab, Cipla, Ranbaxy, etc have created awareness about the Indian market prospects in the international pharmaceutical market. Approvals given by Foods and Drugs Administration (FDA) and ANDA (Abbreviated New Drug Application)/DMF (Drug Master File) have played an important role in making India a cost-effective and high quality product manufacturer. Furthermore, the changes that took place in the patent law, change of process patent to product patent, have helped in reducing the risk of loss for intellectual property.

Industry Strengths:

Capital Investment in Technology: Owing to the availability of advanced technology at low costs, the companies can produce drugs at lower costs.

Cost Effective: The filing cost of ANDAS and DMFs is comparatively low for the Indian companies.

Manpower: There is a large pool of technical experts available at modest salaries.

Contract Research & Contract Manufacturing: There is a good scope for contract research and contract manufacturing.

Infrastructure: There is a well-developed infrastructure for the pharmaceutical industry.

Generic Drugs: In the last few years, the generic drug-manufacturing segment has received huge investments, in the process making it more competitive and efficient.

     -Introduction
     -Sector Outlook
     -Classification
     -Current Scenario
     -Future Prospects
     -Swot Analysis

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Overview of Pharmaceutical Sector