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Indian Pharma Industry

Indian Pharmaceutical Sector: Economic value

The Indian pharmaceutical industry, which is now meeting over 95% of the country's pharmaceutical needs, was almost non-existent before 1970. With the compound annual growth of

19.8% the industry has grown from Rs.4 billion in 1970 to Rs.290 billion in 2003. The pharma sector has shown tremendous growth over the years. About 250 Indian pharmaceutical companies hold 70% of the market share with top players controlling about 7% of the market share.

On 1st January 2005, the Government of India issued patent ordinance according to which the Indian pharma companies can no longer produce patented drugs.

So now the companies have started exploring new business opportunities, including contract research (drug discovery and clinical trials), co-marketing alliances and contract manufacturing.

A few years ago, investment in R&D was as low as 0.001% of the total R&D worldwide, but now companies are focusing on drug discovery and R&D. They are spending over 5% of their turnover on R&D e.g. Wockhardt (8%), Cipla (4%), Cadila (4.45%).

The value of Indian Over-The-Counter Medicines (OTCs) market is over US$ 940 million and is

growing at the rate of 20% per year. There are about 61 US FDA approved plants in India, which will help Indian companies grab the opportunity of contract manufacturing.

Indian Pharmaceuticals Market

The growth of market share of Indian pharmaceutical companies in the domestic pharma sector over the years is as follows:

Year	Indian Companies	MNCs
1999	68%	32%
2000	70%	30%
2001	74%	26%
2002	72%	28%
2003	73%	27%