India is now among the top five pharmaceutical emerging markets globally and is a front runner in a wide range of specialties involving complex drugs' manufacture, development, and technology. The Indian pharmaceutical industry is a highly knowledge based industry which is growing steadily and plays a major role in the Indian economy. As a highly organised sector, the number of pharmaceutical companies are increasing their operations in India. The industry is expected to touch US$ 35.9 billion by 2016.
The Department of Pharmaceuticals has prepared a 'Pharma Vision 2020' document for making India one of the leading destinations for end-to-end drug discovery and innovation. The department provides requisite support by way of world class infrastructure, internationally competitive scientific manpower for pharma research and development (R&D), venture fund for research in the public and private domain and such other measures.
Sector Structure/ Market Size
The domestic pharma market has reported total sales of Rs 6,370 crore (US$ 1.03 billion) in the month of May 2013, registering a growth of 6.8 per cent, as per IMS Health. The major factors responsible are increasing sales of generic medicines, continued growth in chronic therapies and a greater penetration in rural markets.
The cumulative drugs and pharmaceuticals sector has attracted foreign direct investments (FDI) worth US$ 11,304.91 million during April 2000 to April 2013, according to the latest data published by Department of Industrial Policy and Promotion (DIPP).
The Indian pharmaceutical industry would continue to experience strong growth as structural growth drivers continue to remain impervious. The industry is expected to revert a growth of 10-12 percent in 2013-14, according to a study by ICRA. It is also expected that in-organic investments will gain momentum in the medium-term as companies plan to create stronger presence in emerging markets and build expertise in select therapy areas.
Among the top 10 companies, Cipla with total sales of Rs 302 crore (US$ 49.13 million), Sun Rs 297 crore (US$ 48.32 miliion), Alkem Rs 222 crore (US$ 36.12 million) and Sanofi Rs 186 crore (US$ 30.26 million) were the fastest growing corporations for the month of May 2013.
Pharmaceutical exports from the country during 2012-13 stood at US$14.6 billion, up from US$13.2 billion the previous year, as per P V Appaji, Director General, Pharmexcil.
The Ministry of Commerce has targeted Indian pharma sector exports at US$ 25 billion by 2016. The Government has also planned a ‘Pharma India’ brand promotion action plan spanning over a three-year period to give an impetus to generic exports.
In order to boost the export capability, Export-Import Bank of India (Exim Bank), has decided to expand the scope of its finance to pharmaceutical companies for extended repayment periods. Eligible export oriented companies can avail finance from Exim Bank for a maximum repayment period of 10 years with a moratorium of up to 36 months.
“Of the export markets, Indian pharma will focus on the US market which presents significant opportunities for the next two years for generics, due to patent cliffs and recent changes in healthcare policies,” said the India Ratings report on outlook for Indian pharmaceuticals for 2013.
Generics will continue to dominate the market while patent-protected products are likely to constitute 10 per cent of the pie till 2015, according to McKinsey report 'India Pharma 2015- Unlocking the potential of Indian Pharmaceuticals market'.
Global demand for generic drugs from Indian companies is booming as developed nations battle rising healthcare costs. As a result, generics companies are increasingly focusing on expanding presence in relatively under-penetrated markets (i.e. France, Spain & Italy), branded generic markets of East Europe and niche areas like complex generics, OTCs etc.