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Industry Insight - Indian Pharmaceuticals Product Image

Industry Insight - Indian Pharmaceuticals

  • Published: December 2010
  • Region: India
  • 248 Pages
  • Cygnus Research

FEATURED COMPANIES

  • Alembic Ltd
  • Aventis Pharma Ltd
  • Cadila Healthcare Ltd
  • Daiichi Sankyo
  • Ipca Laboratories Ltd
  • Lupin Ltd
  • MORE

The pharmaceutical industry is characterised by a highly risky and lengthy R&D process, intense competition for intellectual property, stringent government regulation and powerful purchaser pressures.

The pharmaceutical industry in India is at the forefront of the country's science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. The Indian pharmaceuticals market is expected to grow from the current US$19 billion to US$32 billion by 2015 at CAGR of 18-19% whereas domestic sales is geared to expand nearly about US$20 billion by 2015 from an estimated size of US$12.76 billion in 2010. The growth of a domestic pharmaceutical company is critically dependent on its therapeutic presence. Among the acute therapies, anti-infective is the major contributing segment accounting for 17% of the total pharma sales market in India followed by Gastrointestinal segment which contributes 11% of the total sales. Cygnus estimates that, the Indian pharma export grow with a CAGR of 21.5% from 2008-09 to 2012-13 and poised to reach over US$23 billion.

The size of the global market for pharmaceuticals is expected to grow nearly US$300 READ MORE >

Executive Summary
Highlights
1. Industry Overview – Global and Domestic
1.1 Global Pharmaceutical Market
1.1.1 Leading Therapeutic Classes
1.1.2 Major Markets
1.1.3 Trends in Pharmaceutical Industry in 2010
1.1.4 Global M&A
1.1.5 Major Global Players
1.2 Indian Pharmaceutical Industry
1.2.1 Introduction
1.2.3 Segmentation of the Indian Pharmaceutical Industry
1.2.4 Pharmaceutical Market structure and Size
1.2.5 Major Therapeutic Segments
1.2.6 Merger & Acquisition
1.2.7 Demand-Supply Analysis
1.2.8 Foreign Direct Investments in Indian Pharma
2. Foreign Trade in Pharmaceutical Industry
2.1 Exports.
2.1.1 Country Wise Exports
2.2 Imports.
3. Growth Drivers
3.1 Global Growth Drivers
3.1.1 Innovation in Biotechnology
3.1.2 Demographic Transition
3.1.3 Rising Real Incomes
3.1.4 Medical Technology
3.1.5 Generic and Niche
3.1.6 Unmet Medical Needs
3.2 Indian Pharma Drivers
3.2.1 Ageing Population
3.2.2 Lifestyle Drugs
3.2.3 Healthcare Expenditure
3.2.4 Upgradation of Medical Services, Devices & Equipment
3.2.5 Exports
3.2.6 Generic Drugs
3.2.7 Research & Development
3.2.8 Contract Manufacturing Opportunities
3.2.9 Middle Class, Rural Market to Fuel Pharma Growth
3.2.10 Pharma Firms Betting Big on Nutraceuticals
4. Issues & Challenges
4.1 Sustaining Exports
4.2 IPR Issues
4.2.1 Pricing .
4.2.2 Data protection
4.3 R&D Focus
4.3.1 Looming shortage of trained human resources
4.3.2 Animal trials
4.3.3 Regulatory infrastructure
4.3.4 Managing productivity
4.4 Exploiting Generic Opportunities requires Huge Investment
4.5 Price Control
4.6 Infrastructure
4.6.1 R&D infrastructure
4.6.2 Quality of marketing infrastructure
4.7 Spurious Drugs
5. Major Players
5.1 Daiichi Sankyo
5.1.1 Business Profile
5.1.2 Strategies
5.1.3 Financial Profile
5.1.4 SWOT Analysis
5.1.5 Outlook
5.2 Dr Reddy's Laboratories Ltd
5.2.1 Business Profile
5.2.2 Strategies
5.2.3 Financial profile
5.2.4 SWOT Analysis
5.2.5 Outlook
5.3 Cipla Ltd
5.3.1 Business Profile
5.3.2 Strategies
5.3.3 Financial Profile
5.3.4 SWOT Analysis
5.3.5 Outlook
5.4 Sun Pharmaceutical Industries Ltd
5.4.1 Business Profile
5.4.2 Strategies
5.4.3 Financial Profile
5.4.4 SWOT Analysis
5.4.5 Outlook
5.5 Piramal Healthcare Ltd
5.5.1 Business Profile
5.5.2 Strategies
5.5.3 Financial Profile
5.5.4 SWOT Analysis
5.5.5 Outlook
5.6 Lupin Ltd
5.6.1 Business Profile
5.6.2 Strategies
5.6.3 Financial profile
5.6.4 SWOT Analysis
5.6.5 Outlook
5.7 Merck India Ltd
5.7.1 Business Profile
5.7.2 Strategies
5.7.3 Financial Profile
5.7.4 SWOT Analysis
5.7.5 Outlook
5.8 Jubilant Organosys
5.8.1 Business Profile
5.8.2 Strategies
5.8.3 Financial profile
5.8.4 SWOT Analysis
5.8.5 Outlook
5.9 Aurobindo Pharma Ltd
5.9.1 Business Profile
5.9.2 Strategies
5.9.3 Financial profile
5.9.4 SWOT Analysis
5.9.5 Outlook
5.10 Cadila Healthcare Ltd
5.10.1 Business Profile
5.10.2 Strategies
5.10.3 Financial Profile
5.10.4 SWOT Analysis
5.10.5 Outlook
5.11 Glenmark Pharmaceuticals Ltd
5.11.1 Business Profile
5.11.2 Strategies
5.11.3 Financial Profile
5.11.4 SWOT Analysis
5.11.5 Outlook
5.12 Matrix Laboratories
5.12.1 Business Profile
5.12.2 Strategies
5.12.3 Financial Profile
5.12.4 SWOT Analysis
5.12.5 Outlook
5.13. GlaxoSmithKline Pharmaceuticals Ltd
5.13.1 Business Profile
5.13.2 Strategies
5.13.3 Financial Profile
5.13.4 SWOT Analysis
5.13.5 Outlook
5.14 Torrent Pharmaceuticals
5.14.1 Business Profile
5.14.2 Strategies
5.14.2 Strategies
5.14.3 Financial Profile
5.14.4 SWOT Analysis
5.14.5 Outlook
5.15 Orchid Chemicals and Pharmaceuticals Ltd
5.15.1 Business Profile
5.15.2 Strategies
5.15.3 Financial Profile
5.15.4 SWOT Analysis
5.15.5 Outlook
5.16 Ipca Laboratories Ltd
5.16.1 Business Profile
5.16.2 Strategies
5.16.3 Financial Profile
5.16.4 SWOT Analysis
5.16.5 Outlook
5.17 Biocon Limited
5.17.1 Business Profile
5.17.2 Strategies
5.17.3 Financial Profile
5.17.4 SWOT Analysis
5.17.5 Outlook
5.18 Divis laboratories
5.18.1 Business profile
5.18.2 Strategies
5.18.3 Financial Profile
5.18.4 SWOT Analysis
5.18.5 Outlook
5.19 Alembic Ltd
5.19.1 Business Profile
5.19.2 Strategies
5.19.3 Financial Profile
5.19.4 SWOT Analysis
5.19.5 Outlook
5.20 Aventis Pharma Ltd
5.20.1 Business Profile
5.20.2 Strategies
5.20.3 Financial Profile
5.20.4 SWOT Analysis
5.20.5 Outlook
6. Outsourcing Opportunities
6.1 Factors Driving Outsourcing
6.1.1 Value Chain Optimisation
6.1.2 FDA-approved Manufacturing Plants in India
6.1.3 Weaker Pipelines and Rising Approval Times
6.1.4 Pressure to Cut Prices
6.1.5 Declining Market Exclusivity Period
6.1.6 Need to Improve Marketing Productivity
6.2 Outsourcing Market
6.2.1 Indian Market
6.2.2 Opportunities for Indian Pharma Companies
6.2.3 Contract Manufacturing
6.2.4 Contract Research
7. Generic Opportunities
7.1 Generics Market Overview
7.2 Factors Driving Generics Market in India
7.2.1 Cost advantage
7.2.2 Drugs going off patent
7.2.3 Rising healthcare expenditure
7.2.4 Growing population
7.2.5 Emerging lifestyle diseases
8. Regulatory Issues
8.1 Overview
8.2 Regulatory Environment
8.2.1 General regulations
8.3 Entry Strategies
8.3.1 Importing pharmaceuticals
8.3.2 Manufacturing under license
8.3.3 Entry through joint venture/subsidiary
8.3.4 Approvals for foreign companies with prior Indian exposure
8.3.5 Additional options
8.4 Key Legislations
8.4.1 The Drugs and Cosmetics Act, 1940
8.4.2 The Medicinal & Toilet Preparations Act, 1955 with Rules, 1956
8.4.3 The Drug Policy, 1986
8.4.4 The Essential Commodities Act, 1955
8.4.5 Indian Patents Act, 1970
8.4.6 The Drugs Price Control Order, 1995
8.4.7 Good Manufacturing Practices
8.4.8 The Pharmacy Act, 1948
8.5 Regulatory Bodies
8.5.1 The Drugs Controller of India
8.5.2 State Food and Drug Administration
8.5.3 National Pharmaceutical Pricing Authority
8.5.4 Department of Chemicals and Petrochemicals
8.5.5 Foreign Investment promotion board
8.5.6 Central Drugs Standard Control Organisation
8.5.7 Central Drug Authority
8.6 Price Controls
8.6.1 Pricing of Scheduled Bulk Drugs
8.6.2 Pricing of Scheduled Formulations Imported into India
8.6.3 Pricing Regulations
8.7 Intellectual Property Rights
8.7.1 Legal Procedure
8.7.2 Compulsory Licensing and Revocation of EMR
8.7.3 Permission for residents to apply for patents outside India
8.7.4 Trademarks
8.8 Manufacturing
8.8.1 Industrial Licensing
8.8.2 Additional Approvals/Registration
8.9 Imports
8.9.1 Imports of Capital Goods and Raw Materials
8.9.2 Pharmaceutical Imports
8.10 New Drug Approval Process
8.10.1 Drug Approval Procedure
8.11 Product Standards
8.11.1 Labelling
8.12 Tariff Structure
8.12.1 Local Manufacturing Duty
8.12.2 Sales Tax
8.13 Marketing and Distribution
8.13.1 Licensing of sales outlets and stock holding
8.13.2 Prescription Drugs
8.13.3 Advertisement and Promotion
8.13.4 Regulations of Advertising
8.13.5 Packing and Labelling
8.13.6 Distribution
8.13.7 Brands
8.13.8 Restrictive Trade Practices
8.13.9 Consumer Protection
9. Critical Success Factors
9.1 Research & Development
9.2 New Product Development
9.3 Therapeutic Coverage
9.4 Marketing
9.5 Exports
9.6 Critical Mass
9.7 Low-cost Production
9.8 World-class Practices
10. Future Outlook
Bibliography

LIST OF CHARTS
Figure 1.1: Global pharmaceutical market value (2007-2012E)
Figure 1.2: Percentage share of global therapeutic segment (2005-09)
Figure 1.3: Pharmaceutical Industry Structure
Figure1.4: Therapeutic Segmentation
Figure 1.5: Chronic Segment
Figure 1.6: Acute Segment
Figure 1.7: Indian Bulk Drugs Market
Figure 1.8: Indian Pharmaceutical Market Structure
Figure 1.9: Revenue flow in the Pharmaceutical Market
Figure 1.10: Indian Domestic Pharmaceutical Market
Figure 1.11: Major Therapeutic Segments Contribution Percentage
Figure 1.12: Sector-wise FDI Inflows
Figure 1.13: Top Investing Countries FDI Equity Inflows in India
Figure2.1: Indian Pharmaceutical Exports
Figure3.1: Percentage of population above 65 years
Figure 3.3: Age-wise Population Distribution
Figure 3.4: Pattern of healthcare expenditure
Figure 6.1: R&D value chain
Figure 6.2: Broad categories in R&D value chain
Figure 6.3: Average time taken for drug discovery
Figure 6.4: FDA-approved manufacturing units in countries other than the US, 2006
Figure 6.5: Global Pharmaceutical Outsourcing Industry
Figure 6.6: Indian Pharmaceutical Outsourcing Market
Figure 6.7: Indian CMO Market by Segment
Figure 6.8: Indian CRO Market
Figure 7.1: Global generic market (2007-13E)
Figure 7.2: Patent expires by value (2008-12E)
Figure 8.1: Organisational Chart of Department of Chemical and Petrochemicals
Figure 10.1: Future outlook (FY10-15)

LIST OF TABLES
Table 1.1: Leading Therapeutic Segments-2009
Table 1.2: Leading brands in therapeutic segment -2009
Table 1.3: Major Markets -2009
Table 1.4: M&A in 2009 & 2010
Table 1.5: Key therapeutic categories
Table 1.6: Major Deals Announced/Completed by Indian Companies 2009 &2010
Table 1.7: Demand – supply factors
Table 2.1: Region-Wise Export Data of Pharmaceutical Products
Table 2.2: India's Export of Pharmaceutical Products
Table 2.3: India's Import of Pharmaceutical Products
Table 3.1: Top 15 drugs going off patent in next four years
Table 3.2: R&D Expenditure -2008-09
Table 3.3: Deals in Collaborative Research
Table 6.1: Leading Indian CROs
Table 7.1: Cost comparison of 20 Branded brands and their generic counterparts
Table 7.2: Drug patent Expires
Table 7.3: Some Examples of Lifestyle Diseases
Table 8.1: Functions of Central and State government
Table 8.2: Tariffs on Pharmaceuticals
Table 8.3: Tariffs on Manufacturing
Table 9.1: Strategic R&D Demergers
Table 9.2: Drug in the pipeline for the domestic companies

The global pharmaceutical industry is a multinational industry that is a highly regulated, capital intensive, and driven by large R&D expenditure. The global pharmaceutical market was valued at US$808 billion in 2009, a growth of 4.5% over the previous year (2008). The value of the global pharmaceutical market is expected to grow 5-7% in 2011, to surpass US$880 billion, compared with a 4-5% pace this year. While the overall market will appear to rebound somewhat in 2011, the underlying constraints to growth in developed markets are stronger than ever – including the impact of major patent expiries and payer mechanisms to limit drug spending. In 2009, top 15 therapeutics market contributes more than 45% of total sales and remaining 55% is contributed by other therapeutics.

The market growth accelerates in the seven "pharmerging" markets—China, Brazil, Mexico, South Korea, India, Turkey and Russia—are expected to account for increased share in 2011 with 12% market share.

The Indian pharmaceutical industry is highly fragmented and significantly influenced by regulations. India has one of the fastest growing pharmaceutical markets in the world, ranking 3rd in terms of volume and 13th in terms of value in the global pharmaceutical market. Driven by a huge patient base, increasing incomes, improving healthcare infrastructure and strong penetration of health insurance, the pharmaceutical market is expected to grow more than double its size in the next five years from 2010. Demand from the exports market has been growing rapidly owing to the capability of Indian players to produce cost-effective drugs with world-class manufacturing facilities.

The pharmaceutical industry classified into segments¬¬¬; based upon manufacture/production otherwise upon the end usage/therapeutic application, which further sub divided into chronic therapy and acute therapy. In India, the chronic segment constitutes only 28% of the market and the rest is acute.

The Indian domestic pharmaceutical market size is estimated at US$12.76 billion in the year 2010 and is expected to grow at a CAGR of 9.5% till 2015. The growth of a domestic pharmaceutical company is critically dependent on its therapeutic presence. Among the acute therapies, anti-infective is the major contributing segment accounting for 17% of the total pharma sales market in India. The Indian pharmaceutical exports in 2009-10 were valued at US$12.5 billion as compared to US$10.6 billion in 2008-09, thus growing 17.9% higher over the previous year. Cygnus estimates that, the Indian pharma export grow with a CAGR of 21.5% from 2008-09 to 2012-13 and poised to reach over US$23 billion. The total imports of pharmaceutical products were US$ 1097.88 million, which registered a growth of 18.70% in the year 2009-10. India heavily imports from Switzerland, USA, Germany, and UK.

India's rural pharma market is experiencing strong growth. While Small towns contribute 20% to the country's pharma market, rural areas account for 21%. The strong growth of rural India can also be attributed to strong distribution network. The focus of pharmaceutical marketing has shifted from efficiency to effectiveness. Drug companies are also focusing on productivity—improving return from every single dollar spent on promoting or selling the product.

However, a few concerns need attention. These include strengthening the regulatory infrastructure and framework within the country, investing in developing educational infrastructure to ensure supply of skilled talent pool, building stronger capabilities on the discovery front and controlling the production of spurious drugs.

- Daiichi Sankyo
- Dr Reddy's Laboratories Ltd
- Cipla Ltd
- Sun Pharmaceutical Industries Ltd
- Piramal Healthcare Ltd
- Lupin Ltd
- Merck India Ltd
- Jubilant Organosys
- Aurobindo Pharma Ltd
- Cadila Healthcare Ltd
- Glenmark Pharmaceuticals Ltd
- Matrix Laboratories
- GlaxoSmithKline Pharmaceuticals Ltd
- Torrent Pharmaceuticals
- Orchid Chemicals and Pharmaceuticals Ltd
- Ipca Laboratories Ltd
- Biocon Limited
- Divis laboratories
- Alembic Ltd
- Aventis Pharma Ltd

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