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Last Updated: September 17, 2015
Latest update: September, 2015
•Over 2012–20, total healthcare spending is expected to rise at a CAGR of 20 per cent to US$ 280 billion from US$ 65 billion
•Industry revenues are expected to expand at a CAGR of 12.1 per cent during 2012-20 and reach US$ 45 billion
•Pharmaceutical sales, as a percentage of total healthcare spending, are expected to increase to 27 per cent by 2016 from 18.9 per cent in 2008nbsp;
•The Indian pharmaceuticals market increased at a CAGR of 12.79 per cent in 2015 from US$ 6 billion in 2005, and is expected to expand at a CAGR of 15.92 per cent to US$ 55 billion by 2020
•By 2020, India is likely to be among the top three pharmaceutical markets by incremental growth and sixth largest market globally in absolute size
•India’s cost of production is significantly lower than that of the US and almost half of that of Europe. It gives a competitive edge to India over others.
Last Updated: September, 2015
SECTORAL REPORT | August, 2015
The Indian pharmaceuticals market is the third largest in terms of volume and thirteen largest in terms of value, as per a report by equity master. Branded generics dominate the pharmaceuticals market, constituting nearly 70 to 80 per cent of the market. India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global exports in terms of volume. Of late, consolidation has become an important characteristic of the Indian pharmaceutical market as the industry is highly fragmented.
India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers who have the potential to steer the industry ahead to an even higher level.
The UN-backed Medicines Patents Pool has signed six sub-licences with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing them to make generic anti-AIDS medicine Tenofovir Alafenamide (TAF) for 112 developing countries.
According to India Ratings, a Fitch company, the Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR) over the next five years. Presently the market size of the pharmaceutical industry in India stands at US$ 20 billion. As on March 2014, Indian pharmaceutical manufacturing facilities registered with the US Food and Drug Administration (FDA) stood at 523, highest for any country outside the US.
India's biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry and bioinformatics is expected grow at an average growth rate of around 30 per cent a year and reach US$ 100 billion by 2025. Biopharma, comprising vaccines, therapeutics and diagnostics, is the largest sub-sector contributing nearly 62 per cent of the total revenues at Rs 12,600 crore (US$ 1.90 billion).
The Union Cabinet has given its nod for the amendment of the existing FDI policy in the pharmaceutical sector in order to allow FDI up to 100 per cent under the automatic route for manufacturing of medical devices subject to certain conditions.
The drugs and pharmaceuticals sector attracted cumulative foreign direct investment (FDI) inflows worth US$ 13.34 billion between April 2000 and June 2015, according to data released by the Department of Industrial Policy and Promotion (DIPP).
Some of the major investments in the Indian pharmaceutical sector are as follows:
The Addendum 2015 of the Indian Pharmacopoeia (IP) 2014, published by the Indian Pharmacopoeia Commission (IPC) on behalf of the Ministry of Health & Family Welfare, is expected to play a significant role in enhancing the quality of medicines that would in turn promote public health and accelerate the growth and development of pharmaceutical sector.
The Government of India unveiled 'Pharma Vision 2020' aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments. Further, the government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.
Romania is keen to tie up with the Indian pharmaceutical companies for research and develop new drugs. "Romania will collaborate with India for license acquisition to sale India's drugs in Europe," said Mr Mario Crute, Counsellor in Ministry of health in Romania at GCCI. The country will tie up with the Indian pharmaceutical companies for research and develop new drugs.
Some of the major initiatives taken by the government to promote the pharmaceutical sector in India are as follows:
The Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025, driven by increasing consumer spending, rapid urbanisation, and raising healthcare insurance among others.
Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise.
The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.
Exchange rate used INR 1= US$ 0.01508 as on September 9, 2015
References: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP), Press Information Bureau (PIB), Media Reports, Pharmaceuticals Export Promotion Council
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Indian pharma company have won around 40 per cent of all Abbreviated New Drug Approval (ANDA) from the US Food and Drug Administration (FDA) between j...
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