Introduction:The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications.

Pharmaceutical companies are allowed to deal in generic and/or brand medications and medical devices. They are subject to a variety of laws and regulations regarding the patenting, testing and ensuring safety and efficacy and marketing of drugs. Recent trends in Pharma industry The global pharmaceutical market research has been done by many companies and almost all of the market reports indicate a significant growth of Pharma market in 2010-2011. The forecasting indicates pharmaceutical market growth of about 4 6% in 2010-2011. The established markets, including the US, UK, and Japan, together account for 30% of the global demand for pharmaceutical excipients. Pharmaceutical Industry Trends- Global Scenario If present industry overview is taken into consideration then the global pharmaceutical market in 2010 is projected to grow 4 - 6% exceeding $825 billion. The global pharmaceutical market sales are expected to grow at a 4 - 7% compound annual growth rate (CAGR) through 2013. This industry growth is driven by stronger near-term growth in the US market and is based on the global macro economy, the changing combination of innovative and mature products apart from the rising influence of healthcare access and funding on market demand. Global pharmaceutical market value is expected to expand to $975+ billion by 2013. Different regions of the world will influence the pharmaceutical industry trends in different ways. Asia Pacific Pharmaceutical Market The Pharma market world over will experience significant shifts. Asia-Pacific region will emerge as the fastest growing pharmaceutical market over the recent past. The reason for this positive shift can be attributed to the low costs and favorable regulatory environment. This region has experienced important developments regarding contract manufacturing, especially in generics and APIs. Increased R&D activities in the region have helped Asia-Pacific pharmaceutical industry to achieve an estimated market size of around US$ 187 Billion in 2009. Here, the pharmaceutical industry is expected to grow at a CAGR of around 12.6% during 2010-2012. It can, in fact, become the global API production hub in next few years.

Pharmaceutical sales are growing at a fast rate in India, China, Malaysia, South Korea and Indonesia due to the rising disposable income, several health insurance schemes (that ensures the sales of branded drugs), and intense competition among top pharmaceutical companies in the region (that has boosted the availability of low cost drugs). Chinas pharmaceutical market will continue to grow at a 20+ % annually, and will contribute 21% of overall global growth through 2013. India 3rd Largest Producer of Pharmaceuticals Across the World- is already a US$ 8.2 Billion pharmaceutical market. The Indian pharmaceutical industry is further expected to grow by 10% in the year 2010. Middle East Pharmaceutical Market The Middle East combined with the African Pharmaceutical market is projected to grow at a CAGR of around 11% during 2010-2012. The development of infrastructure and rapidly changing regulations in this region are being seen as the cause of its growth. Also there is a high prevalence of diseases and huge population base that increases the overall pharmaceutical sales in this part of the world. Presently South Africa, Saudi Arabia and Israel dominate the region's pharmaceutical industry due to their better infrastructure and regulatory environment. However, The Middle East Pharma market depends on imported pharmaceutical drugs and therapeutics. The governments of countries in this region are taking measures to raise their domestic production through heavy investments in the pharmaceutical industry. How far they are successful in the attempt of becoming considerable Pharma production center remains to be seen. Pharmaceutical Drugs Trends Anti-Diabetic Drugs and those for cardiovascular diseases are expected to see the fastest growth in 2011. Cardiovascular patients will increase to 251 million in 2010, with the greatest rate of growth forecast for the US market. This is due to the changes in demographics and lifestyle that will boost the cardiovascular sales. However, the growth rates will be limited by continued patent expiries for major products and due to the lack of novel therapies. The anti-hypertensives drugs will dominate the global cardiovascular market with a market share of nearly 50%.

SWOT ANALYSIS OF PHARMA INDUSTRY Indian Pharma Industry: SWOT analysis

It is often said that the Pharma sector has no cyclical factor attached to it. Irrespective of whether the economy is in a downturn or in an upturn, the general belief is that demand for drugs is likely to grow steadily over the long-term. True in some sense. But are there risks? This article gives a perspective of the Indian Pharma industry by carrying out a SWOT analysis (Strength, Weakness, Opportunity, and Threat). Before we start the analysis lets look a little back in the industrys last six years performance. The Industry is a largely fragmented and highly competitive with a large number of players having interest in it. The following chart shows the breakup of the growth (YoY) of Indian pharmaceutical industry in last six years.

*Volume growth of existing products The SWOT analysis of the industry reveals the position of the Indian Pharma industry in respect to its internal and external environment.

Strengths: Indian with a population of over a billion is a largely untapped market. In fact the penetration of modern medicine is less than 30% in India. To put things in perspective, per capita expenditure on health care in India is US$ 93 while the same for countries like Brazil is US$ 453 and Malaysia US$189. The growth of middle class in the country has resulted in fast changing lifestyles in urban and to some extent rural centers. This opens a huge market for lifestyle drugs, which has a very low contribution in the Indian markets. Indian manufacturers are one of the lowest cost producers of drugs in the world. With a scalable labor force, Indian manufactures can produce drugs at 40% to 50% of the cost to the rest of the world. In some cases, this cost is as low as 90%. Indian pharmaceutical industry posses excellent chemistry and process reengineering skills. This adds to the competitive advantage of the Indian companies. The strength in chemistry skill help Indian companies to develop processes, which are cost effective. Weakness: The Indian Pharma companies are marred by the price regulation. Over a period of time, this regulation has reduced the pricing ability of companies. The NPPA (National Pharma Pricing Authority), which is the authority to decide the various pricing parameters, sets prices of different drugs, which leads to lower profitability for the companies. The companies, which are lowest cost producers, are at advantage while those who cannot produce have either to stop production or bear losses. Indian Pharma sector has been marred by lack of product patent, which prevents global Pharma companies to introduce new drugs in the country and discourages innovation and drug discovery. But this has provided an upper hand to the Indian Pharma companies. Indian Pharma market is one of the least penetrated in the world. However, growth has been slow to come by. As a result, Indian majors are relying on exports for growth. To put things in to perspective, India accounts for almost 16% of the world population while the total size of industry is just 1% of the global Pharma industry. Due to very low barriers to entry, Indian Pharma industry is highly fragmented with about 300 large manufacturing units and about 18,000 small units spread across the country. This makes Indian Pharma market increasingly competitive. The industry witnesses price competition, which reduces the growth of the industry in value term. To put things in perspective, in the year 2003, the industry actually grew by 10.4% but due to price competition, the growth in value terms was 8.2% (prices actually declined by 2.2%)

Opportunities The migration into a product patent based regime is likely to transform industry fortunes in the long term. The new patent product regime will bring with it new innovative drugs. This will increase the profitability of MNC Pharma companies and will force domestic Pharma companies to focus more on R&D. This migration could result in consolidation as well. Very small players may not be able to cope up with the challenging environment and may succumb to giants. Large number of drugs going off-patent in Europe and in the US between 2005 to 2009 offers a big opportunity for the Indian companies to capture this market. Since generic drugs are commodities by nature, Indian producers have the competitive advantage, as they are the lowest cost producers of drugs in the world. Opening up of health insurance sector and the expected growth in per capita income are key growth drivers from a long-term perspective. This leads to the expansion of healthcare industry of which Pharma industry is an integral part. Being the lowest cost producer combined with FDA approved plants; Indian companies can become a global outsourcing hub for pharmaceutical products. Threats: There are certain concerns over the patent regime regarding its current structure. It might be possible that the new government may change certain provisions of the patent act formulated by the preceding government. Threats from other low cost countries like China and Israel exist. However, on the quality front, India is better placed relative to China. So, differentiation in the contract manufacturing side may wane. The short-term threat for the Pharma industry is the uncertainty regarding the implementation of VAT. Though this is likely to have a negative impact in the short-term, the implications over the long-term are positive for the industry. http://www.docstoc.com/docs/13899768/Pest-Analysis-of-pharma-IndustryCOMPLETE-PROJECT

CASE STUDIES:1. LUPIN:Abstract:

The case presents the strategies adopted by Lupin Limited to emerge as one of the leading pharmaceutical companies in India. For the fiscal 2004-05, Lupin reported revenues of Rs. 12.12 billion, placing it among the top six companies in the Indian pharma industry. The company aims at achieving the revenues of US$ 1 billion by 2009. To achieve this target, Lupin has made heavy investments in R&D, manufacturing processes and is focusing on exports. Notwithstanding Lupin's success till date and its plans for future growth, the company faces significant threat in the form of product patents, high debts and rising competition from both local and foreign pharma companies. The case highlights the challenges facing Lupin and its plans to overcome these challenges. Issues: Recent trends in the Indian Pharmaceutical Industry Lupin's journey from a drug manufacturer to a national level pharma company Growth Strategies of Lupin Limited Importance of patents (product and process) in the pharma industry Product patent regime in India

Top 10 Pharmaceutical Companies in India

1. 2. Ranbaxy With a 2007 turnover of Rs 4,198.96 crore (Rs 41.989 billion) by sales, Ranbaxy is the largest pharmaceutical company in India. 3. 4. Dr Reddy's Laboratories With the turnover of Rs 4,162.25 crore (Rs 41.622 billion), Dr Reddy's Laboratories is the second largest pharmaceutical company in India. 5. 6. Cipla With the revenue of Rs 3,763.72 crore (Rs 37.637 billion) Cipla is the third largest pharmaceutical company in India. 7. 8. Sun Pharma Industries Sun Pharma Industries is the fourth largest pharma company in India with the total revenue of Rs 2,463.59 crore (Rs 24.635 billion) and led by Dilip Sanghvi. 9. Lupin Labs

10. Lupin Labs has the total revenue of Rs 2,215.52 crore (Rs 22.155 billion 11. Aurobindo Pharma 12. Sales revenues stood at Rs 2,080.19 crore (Rs 20.801 billion) makes it the sixth largest pharmaceutical company in India. 13. GlaxoSmithKline Pharma (GSK) 14. GSK is the seventh largest pharma company with the total sales revenue of Rs 1,773.41 crore (Rs 17.734 billion) 15. Cadila Healthcare 16. Eight largest company has the total sale revenue at Rs 1,613.00 crore (Rs 16.13 billion) 17. Aventis Pharma 18. Aventis Pharma has the revenue of Rs 983.80 crore (Rs 9.838 billion) and the ninth largest pharmaceutical company in India. 19. Ipca Laboratories 20. Revenue of Rs 980.44 crore (Rs 9.804 billion) makes Ipca India's 10th largest pharma firm by sales.

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