Presented by:

P.UDAY KUMAR
08B81EOO51
 India pharma Mkt size FY09 Rs 93881 ($19 bn) cr on the basis of
sales, g=13%
 India is the world’s 4th largest producer of pharmaceuticals by
volume (accounting for around 8% of global production)
 In value terms, production accounts for around 1.5% of the world
total.
 Employs around 500,000
 Indian company meets 95% of domestic sales
 Fragmented industry contributes 1.6% to GDP.
 5,600 smaller licensed generics manufacturers
 270 large R&D based pharmaceutical companies in India and their
share is around 70%
 India produces 22% of world generics
 Per capita consumption of drugs is very low $93 as compared to
$412(Japan), $222(Germany), $191(US)
 India among top 5 bulk drug producers in world
 Ranbaxy is 7th world’s largest generic manufacture
Clinical Trials

Preclinical
  Phase I Phase II Phase III FDA   Phase IV
Testing

Years 3.5 1 2 3 2.5 12 Total

1000 to
Laboratory 20 to 80 100 to 300
Test 3000
and animal healthy patient
Population patient
studies volunteers volunteers
volunteers
Additional
Verify Review
File IND at File NDA at Post
effectivenes process /
Assess FDA Evaluate FDA marketing
Determine s, monitor Approval
safety and effectivenes   testing
Purpose safety and adverse
biological s, look for required by
dosage reactions
activity side effects FDA
from long-
term use
5,000
Success
compounds 5 enter trials 1 approved
Rate
evaluated
 Top 10 companies contributes 30% of market share(on the basis
of standalone sales)

Company Name MARKET SHARE %

Cipla Ltd. 5.60
Ranbaxy Laboratories Ltd. 4.76
Dr. Reddy'S Laboratories Ltd. 4.47
Sun Pharmaceutical Inds. Ltd. 4.03
Aurobindo Pharma Ltd. 2.98
Cadila Healthcare Ltd. 2.07
Glaxosmithkline Pharmaceuticals Ltd. 1.79
Matrix Laboratories Ltd. 1.60
Ipca Laboratories Ltd. 1.36
Orchid Chemicals & Pharmaceuticals Ltd. 1.29
100 manufacturing facilities approved by the US Food and Drug
Administration (FDA)
 Strengths
1. India is regarded as having the edge over China in terms of:
◦ Qualified, English-speaking employees
◦ Fair protection of intellectual property rights supported by well-developed
judicial system.

2. Availability of skilled scientists/technicians/management personnel

at affordable cost.

3. 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%.

4. Well developed chemistry R & D and manufacturing infrastructure

with proven track record in advanced chemistry capabilities, design
of high tech manufacturing facilities and regulatory compliance.

8
 The NPPA (National Pharma Pricing Authority),
sets prices of different drugs, which leads to
lower profitability for the companies.

 Indian pharma market is one of the least

penetrated in the world: India accounts for
almost 16% of the world population while the
total size of industry is just 1-2% of the global
pharma industry

 Large no. of small players increases competition

and reduces efficiency
 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

 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

 Can become a global outsourcing hub for pharmaceutical

products

 New markets are opening

 Aging of the world population, Growing incomes, Growing

attention for health.
 Containment of rising health-care cost.
 High Cost of discovering new products and fewer
discoveries.
 Stricter registration procedures.
 High entry cost in newer markets.
 Threats from other low cost countries like China
and Israel exist
 Mature pharmaceutical market: is expected to
grow at 1% ~ 4% by 2013
 Emerging pharmaceutical market: is expected to
grow at 13% ~ 16% by 2013
 High growth in generic segment as $123bn worth
patent will expire by 2012 ($18.4bn benegit to
India)
 Pricing pressures and shrinking margins in the
generics space and the increasing litigation
instances in the US are compelling Indian
companies to consider opportunities beyond US
CUSTOM DUTY
 Exemption of custom duty for import of all capital goods,
inputs, consumables and reference standards for R&D
purposes

 Extension of customs duty exemption to more life saving

drugs and other anti–Aids and anti–cancer formulations

EXCISE DUTY
 Goods manufactured in R&D centres should be exempted
from excise duty and service tax

 Extension of excise duty exemption to more life saving

drugs and other anti –Aids and anti –cancer formulations

OTHERS
 Strengthen and increase capital outlay for academic
institutions engaged in scientific research
 Future Trends
 Smaller companies, which had so far benefited from the protective
regime, may be forced to become contracting units, or close shop.
 Generics will have a huge demand.

 Increasing R&D costs will lead to more consolidation among

international companies. Within 5 years, the top ten pharma
companies will control over 60% of the world market.

 International companies could set up their own R&D labs in India
and develop drugs for tropical diseases.

 Indian pharma companies are expected to move up the value chain

from merely being reverse engineers to developers of proprietary
products in the US market.
 The Indian market has some unique advantages.
 India has a 60-year-old thriving democracy.
 It has an educated work force and English is business language.
 It has a solid legal framework and strong financial markets.
More than 9,000 companies are publicly listed. Professional
services are easily available.
 The country is now committed to an open economy and
globalisation. Above all, it has about 200 million middle class
markets, which is continuously growing. Over time the
international pharmaceutical industry has been finding great
opportunities in India.