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“ANALYSIS OF CURRENT TRENDS IN PHARMACEUTICAL INDUSTRY”

Dissertation Submitted to the Padmashree Dr. D.Y. Patil University In partial fulfillment of the requirements for the award of the Degree of

MASTERS IN BUSINESS ADMINISTRATION
Submitted by: Shailesh Firke (Roll No. 135)

Research Guide:

Suman Saurabh
Lecturer, DYPDBM

Department of Business Management
Padmashree Dr. D.Y. Patil University CBD Belapur, Navi Mumbai

Y. Patil University In partial fulfillment of the requirements for the award of the Degree of MASTERS IN BUSINESS ADMINISTRATION Submitted by: Shailesh Firke (Roll No. 135) Research Guide: Suman Saurabh Lecturer. Patil University CBD Belapur. DYPDBM Department of Business Management Padmashree Dr. Navi Mumbai .Y.“ANALYSIS OF CURRENT TRNEDS IN PHARMACEUTICAL INDUSTRY” Dissertation Submitted to the Padmashree Dr. D. D.

Patil University’s Department of Business Management is my original work and the dissertation has not formed the basis for the award of any degree.DECLARATION I hereby declare that the dissertation “ANALYSIS OF CURRENT TRENDS IN PHARMACEUTICAL INDUSTRY” submitted for the MBA Degree at Padmashree Dr. Place: Mumbai Date: Signature of the Student . fellowship or any other similar titles.Y. D. associate ship.

at Padmashree Dr.CERTIFICATE This is to certify that the dissertation entitled “ANALYSIS OF CURRENT TRENDS IN PHARMACEUTICAL INDUSTRY” is the bonafide research work carried out by Mr. Padmashree Dr. Patil University’s Department of Business Management during the year 2008 . (Mr. Gopal.Y. Director. Department of Business Mgt. D. Patil University) Place: Mumbai Date: . R. D. diploma. Shailesh Firke student of MBA. associateship.2010. in partial fulfillment of the requirements for the award of the Degree of Master in Business Management and that the dissertation has not formed the basis for the award previously of any degree. Suman Saurabh) Project Guide (Dr.Y. fellowship or any other similar title.

Place: Mumbai Date: Signature of Student . I thank Suman Saurabh. Navi Mumbai for having given me her valuable guidance for the project. Patil University. Lecturer. Padmashree Dr. D.Y.ACKNOWLEDGEMENTS In the first place. Without her help it would have been impossible for me to complete the project. Department of Business Management. I would also like to thank the various people from the pharmaceutical industry who have provided me with a lot of information and in fact even sharing some of the confidential company documents and data – many of which I have used in this report and without which this project could not have been completed. I would be failing in my duty if I do not acknowledge with a deep sense of gratitude the sacrifices made by my parents and thus have helped me in completing the project work successfully.

mergers and acquisition scenario in future. Signature of the Student . discussions were held with several people in the pharmaceutical sector to understand the veracity of the above thought process and also understand the real issues plaguing the industry. All these aspects then resulted in the development of the project report titled “ANALYSIS OF CURRENT TRENDS IN PHARMACEUTICAL INDUSTRY” It is strongly hoped that this project covers not only the various requirements of the Project Study but also of the Industry.Preface While searching for a suitable topic for the MBA Dissertation. I happened to meet a person from the Pharmaceutical Sector. it transpired that the problem that this sector faces is with respect to patent. The topics having aroused my curiosity. During the course of the discussion. who suggested to me the topic on the Pharmaceutical Sector of India.

8 TITLE List of Tables List of Figures List of Abbreviations Executive Summary Objective of the Study Review of Literature The Pharmaceutical Industry Overview of Pharmaceutical Industry World Pharmaceutical Industry Indian pharmaceutical Industry Types of Drug Systems in India Industry Segmentation Bulk Drugs Formulations Contract Research and Manufacturing Domestic Growth Drivers Pharmaceutical Regulatory Bodies in India Patent What is Patent Background of Pharmaceutical Industry with Respects to Patients Patenting Independence 1972 Patent Amendment Act 2005 Scenario Post TRIPS Implication does TRIPS have For IPI Novartis Case Study Possible Solution to the Product Patent Issue PAGE NO.7 4.3 4.1 5.TABLE OF CONTENT CHAPTER NO.6 4.9 4.3 5.6 5.2 4.4 5. I II III 1 4 6 19 20 21 23 24 25 26 30 33 34 37 40 41 41 43 44 46 47 49 51 .5 4.7 5.5 5.11 5 5.4 4. A B C 1 2 3 4 4.2 5.1 4.8 4.

5 8 8. 53 54 57 65 66 67 68 74 79 81 82 82 83 84 85 94 122 123 124 126 127 133 136 138 139 139 .TABLE OF CONTENT CHAPTER NO.3 9 9.2 10.Challenges Benefits to Ranbaxy and DAIICHI from the Merger Research Methodology Objective Research Plan Limitation of Study Framework of Analysis Qualitative analysis Quantitative Analysis Indian pharmaceutical Sector .4 11 12 13 13.1 10.The Future Scenario Introductions Future Outlook Pharmaceutical Special Economic Zones Challenges Ahead Conclusion & Recommendations ANNEXURE Bibliography Book Website PAGE NO.4 7.2 7.2 8. 6 6.2 TITLE Pricing Of Drugs Principles and Laws Reasons for Uncertainty over Demand for New Drugs Mergers and Acquisition In the Indian Pharmaceutical Industry Impact of M & A On IPI Drivers in Mergers and Acquisition Mergers and Acquisitions Trends in India Mergers and Acquisition .3 7.1 7.3 10.1 13.2 7 7.1 8.2 10 10.1 9.1 6.

4.2 9.LIST OF TABLES Table No.1 Title Table showing export (Rs.8 9.9 companies Key Financial Ratios of Ranbaxy Key Financial Ratios of Dr.1 9.1 7. In Crores) Merger and Acquisition in Recent Years Interpretation of key financial ratios of top 5 9.6 9.3 companies Operating Cycle Debt Collection Period Interpretation of key financial ratios of bottom 3 9.7 9. Reddy’s Lab Key Financial Ratios of Cipla Key Financial ratios of Sun Pharmaceuticals Key Financial ratios of Piramal Health care I .4 9.5 9.

/ Chart No.7 9.5 4.2 filings (US FDA) Increasing share of Indian companies in DMF 4.4 ORGIMS) Therapeutic wise distribution (ORGIMS) Indian Formulation Exports Growth in Revenues Sales and Other Income of Cipla Growth in Profits of Cipla Exports of Cipla II .3 9.2 9.LIST OF FIGURES & CHARTS Fig.6 4. 4.1 Title Segment-wise sales Increasing share of Indian companies in DMF 4.1 9.4 filings (US FDA) Advantage India-API Growth in domestic formulation industry (OPPI.3 4. 4.

Related aspects of Intellectual Property TRIPS IBEF API IPI QALYs FDA CAGR DMF CRO Rights India Brand Equity Foundation Active Pharmaceutical Ingredients Indian Pharmaceutical Industry Quality Adjusted Life Years Food and Drug Administration Compounded Annual Growth Rate Drug Master File Contract Research Organization Directorate General of Commercial Intelligence and DGCIS NPPA CDSCO DCP ARVs Statistics National Pharmaceutical Pricing Authority Central Drugs Standard and Control Organization Department of Chemicals & Petrochemicals Anti-retro viral drugs International Federation of Pharmaceutical IFPMA DPCO Manufacturers and Associations Drug Policy Control Order Organization for Economic Co-operation and OECD OTC Development Over the Counter III .LIST OF ABBREVATIONS GMP Good Manufacturing Practices Trade .