PHARMACEUTICALS SECTOR:

This sector is a sunrise industry in the country. India is now world renowned for its pharma
innovation and for producing high quality medicines at a low cost. India's burgeoning
pharmaceuticals sector is not only a source of innovation and job creation, but it has also
emerged as a critical global healthcare provider. During the COVID-19 epidemic, India
exemplified international collaboration by supplying vital medications to a number of
nations. In a post-pandemic world, India's pharmaceuticals sector is poised to soar to new
heights, as the world looks to India to make the finest medications available to millions at the
most affordable prices. During the COVID-19 epidemic, Prime Minister Narendra Modi
accurately called India as the "pharmacy of the world," delivering much-needed medications
to a number of countries. Over the years, India's renowned pharmaceutical firms have
pioneered ground-breaking innovation, particularly in terms of providing life-saving
medications to those who need them the most at the most inexpensive rates.

PORTERS FIVE FORCES OF PHARMA SECTOR ARE AS FOLLOWS:

 1) BARGAINING POWER OF BUYER:
Buyers' bargaining power is limited in this industry since the medicine or drug is a need for
the buyer, regardless of the selling price. There are pharmacies and online pharmacy
companies that provide discounts on medications, but only up to a specific amount. To attract
new clients, such vendors reduce their profit margins and sell at a discount. The sellers has
due rights to revoke their discount rates at any time, but this will not prevent the customer
from making a purchase. As a result, the buyer's bargaining power in this industry is quite
restricted.

2) BARGAINING POWER OF SUPPLIERS:

In the market, suppliers have little bargaining power. Organic chemicals are used in a variety
of pharmaceutical products. On the market, there are a variety of chemical providers. Pharma
firms might transfer from one company to another instead of paying a high price for
chemicals. Suppliers have more negotiating power in the market for certain APIs where
obtaining raw materials is difficult, but because most raw materials are readily available and
suppliers are many, where one can simply be replaced by the other, their bargaining strength
in the market is diminished.

3) RIVALRY AMONG EXISTING COMPETITORS:

With over 3,000 pharma businesses and 10,500 production units, the pharmaceutical sector is
extremely fragmented. This market is extremely competitive due to rising demand for high-
quality pharmaceuticals, low-to-moderate entry barriers for new entrants, and the existence of
a number of big and small firms. With additional medications coming off patent, the
industry's growth prospects are likely to skyrocket.

4) THREAT TO SUBSTITUTE PRODUCTS:

Except for homoeopathic and ayurvedic therapies, allopathic medications offer few
alternatives. Generic medicines allow one firm to be substituted by another within the
industry. One drug can replace another in unbranded markets, however in branded markets,
when the medical practitioner subscribes the medicines to the patients, one drug can replace
another.
5) THREAT OF NEW ENTRANTS:
It is a tough sector to enter or quit since it requires significant regulatory permission,
licencing, high financial backing and investment, an effective distribution network, brand
patents, and a strong brand presence. As a result, the danger of a new entry to established
businesses is low to moderate. Based on the aforementioned variables. However, many
pharmaceutical businesses are currently making headway in the market by switching from a
traditional business approach to a new business approach that is emerging. Contract research
(drug development and clinical trials), contract manufacturing, and co-marketing alliances are
all examples of the new business strategy. Many new firms will be able to join the market
without the expense of research & development, clinical trials, and medication
manufacturing. Furthermore, patent expiration is one of the factors that is allowing lower-cost
generic manufacturers to gain wider market access. In addition, the government has stepped
up its efforts to reduce healthcare costs. It is generating publicity.