“The Indian pharmaceutical industry is a success story providing
employment for millions and ensuring that essential drugs at affordable
prices are available to the vast population of this sub-continent.”
Richard Gerster
The
Indian Pharmaceutical Industry today is in the front rank of
India’s science-based industries with wide ranging capabilities in the
complex field of drug manufacture and technology. A highly organized sector,
the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing
at about 8 to 9 percent annually. It ranks very high in the third world, in
terms of technology, quality and range of medicines manufactured. From
simple headache pills to sophisticated antibiotics and complex cardiac
compounds, almost every type of medicine is now made indigenously.
Playing a key role in promoting and sustaining development in the vital
field of medicines,
Indian Pharma Industry boasts of quality
producers and many units approved by regulatory authorities in USA and UK.
International companies associated with this sector have stimulated,
assisted and spearheaded this dynamic development in the past 53 years and
helped to put India on the pharmaceutical map of the world.
The Indian Pharmaceutical sector is highly fragmented with more than 20,000
registered units. It has expanded drastically in the last two decades. The
leading 250 pharmaceutical companies control 70% of the market with market
leader holding nearly 7% of the market share. It is an extremely fragmented
market with severe price competition and government price control.
The pharmaceutical industry in India meets around 70% of the country's
demand for bulk drugs, drug intermediates, pharmaceutical formulations,
chemicals, tablets, capsules, orals and injectibles. There are about 250
large units and about 8000 Small Scale Units, which form the core of the
pharmaceutical industry in India (including 5 Central Public Sector Units).
These units produce the complete range of pharmaceutical formulations, i.e.,
medicines ready for consumption by patients and about 350 bulk drugs, i.e.,
chemicals having therapeutic value and used for production of pharmaceutical
formulations.
Following the de-licensing of the pharmaceutical industry, industrial
licensing for most of the drugs and pharmaceutical products has been done
away with. Manufacturers are free to produce any drug duly approved by the
Drug Control Authority. Technologically strong and totally self-reliant, the
pharmaceutical industry in India has low costs of production, low R&D
costs, innovative scientific manpower, strength of national laboratories and
an increasing balance of trade. The Pharmaceutical Industry, with its rich
scientific talents and research capabilities, supported by Intellectual
Property Protection regime is well set to take on the international market.
ADVANTAGE INDIA
Competent workforce: India has a pool of personnel with high
managerial and technical competence as also skilled workforce. It has an
educated work force and English is commonly used. Professional services are
easily available.
Cost-effective chemical synthesis: Its track record of development,
particularly in the area of improved cost-beneficial chemical synthesis for
various drug molecules is excellent. It provides a wide variety of bulk
drugs and exports sophisticated bulk drugs.
Legal & Financial Framework: India has a 53 year old
democracyand hence has a solid legal framework and strong financial markets.
There is already an established international industry and business
community.
Information & Technology: It has a good network of world-class
educational institutions and established strengths in Information
Technology.
Globalisation: The country is committed to a free market economy and
globalization. Above all, it has a 70 million middle class market, which is
continuously growing.
Consolidation: For the first time in many years, the international
pharmaceutical industry is finding great opportunities in India. The process
of consolidation, which has become a generalized phenomenon in the world
pharmaceutical industry, has started taking place in India.
THE GROWTH SCENARIO
India's US$ 3.1 billion pharmaceutical industry is growing at the rate of
14 percent per year. It is one of the largest and most advanced among the
developing countries.
Over 20,000 registered pharmaceutical manufacturers exist in the country.
The domestic pharmaceuticals industry output is expected to exceed Rs260
billion in the financial year 2002, which accounts for merely 1.3% of the
global pharmaceutical sector. Of this, bulk drugs will account for Rs 54 bn
(21%) and formulations, the remaining Rs 210 bn (79%). In financial year
2001, imports were Rs 20 bn while exports were Rs87 bn.
STEPS TO STRENGTHEN THE INDUSTRY
Indian companies need to attain the right product-mix for sustained future
growth. Core competencies will play an important role in determining the
future of many Indian pharmaceutical companies in the post product-patent
regime after 2005. Indian companies, in an effort to consolidate their
position, will have to increasingly look at merger and acquisition options
of either companies or products. This would help them to offset loss of new
product options, improve their R&D efforts and improve distribution to
penetrate markets.
Research and development has always taken the back seat amongst Indian
pharmaceutical companies. In order to stay competitive in the future, Indian
companies will have to refocus and invest heavily in R&D.
The Indian pharmaceutical industry also needs to take advantage of the
recent advances in biotechnology and information technology. The future of
the industry will be determined by how well it markets its products to
several regions and distributes risks, its forward and backward integration
capabilities, its R&D, its consolidation through mergers and
acquisitions, co-marketing and licensing agreements.
Injection
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