Indian Pharma Sector

India is the largest provider of generic drugs globally. Indian pharmaceutical sector supplies over 55%
of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in
the UK. globally, India ranks 3rd in terms of pharmaceutical production by volume and 14th by value.

According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the
next decade. India’s domestic pharmaceutical market is estimated at US$ 42 billion in 2021 and likely
to reach US$ 65 billion by 2024 and further expand to reach ~US$ 120-130 billion by 2030. Generic
drugs, with 71% market share, form the largest segment of the Pharmaceutical industry in India. This
is set to grow as exports of generics to the US rise, as branded drugs worth $55 bn will become off-
patent during 2017-2019. As per the domestic market share in the pharmaceutical industry by
revenue, Anti-Infectives (13.6%), Cardiac (12.4%), and Gastrointestinal (11.5%) had the biggest
market share.

The Indian biotechnology industry was valued at US$ 64 billion in 2019 and is expected to reach US$
150 billion by 2025.
India’s medical devices market stood at US$ 10.36 billion in FY20. The market is expected to increase
at a CAGR of 37% from 2020 to 2025 to reach US$ 50 billion.

India’s drugs and pharmaceuticals exports stood at US$ 24.44 billion in FY21. India is the 12 th largest
exporter of medical goods in the world.

Indian drugs are exported to more than 200 countries in the world, with US being the key market.
Generic drugs account for 20% of the global export in terms of volume, making the country the largest
provider of generic medicines globally. The foreign direct investment (FDI) inflow in the Indian drugs
and pharmaceuticals sector stood at US$ 18.12 billion between April 2000 and June 2021.  FY21,
North America was the largest market for India’s pharma exports with a 34% share 

In the global pharmaceuticals sector, India is a significant and rising player. India is the world's largest
supplier of generic medications, accounting for 20% of the worldwide supply by volume and supplying
about 60% of the global vaccination demand.

Structure of Pharma Industry

Government Initiatives

 Pharma Vision 2020’ by the Government’s Department of Pharmaceuticals aims to make

India a major hub for end-to-end drug discovery. 
 To achieve self-reliance and minimize import dependency in the country's essential bulk
drugs, the Department of Pharmaceuticals initiated a PLI scheme to promote domestic
manufacturing by setting up greenfield plants with minimum domestic value addition in four
separate ‘Target Segments’ with a cumulative outlay of Rs. 6,940 crore (US$ 951.27 million)
from FY21 to FY30. In June 2021, Finance Minister Ms. Nirmala Sitharaman announced an
additional outlay of Rs. 197,000 crore (US $26,578.3 million) that will be utilized over five
years for the pharmaceutical PLI scheme in 13 key sectors such as active pharmaceutical
ingredients, drug intermediaries and key starting materials
 Reduction in approval time for new facilities-Steps taken to reduce approval time for new
facilities. NOC for an export license issued in two weeks compared to12 weeks earlier
 Support for technology upgrades and FDIs-Government is planning to relax FDI norms in the
pharmaceutical sector.In March 2017, the Government decided to create a digital platform to
regulate and track the sale of quality drugs, and it can be used by people living in the country
as well as abroad.
 National pharmaceuticals policy.In 2017,the Department of Pharmaceuticals released a draft
National Pharmaceutical Policy with the following objectives:
o Make all essential drugs accessible to the masses through affordable prices.
o Provide the Indian pharmaceutical sector with a long-term stable policy environment.
o Make India self-sufficient in end-to-end domestic drug manufacturing.
o Maintain world-class quality for domestic consumption and exports.
o Create a positive environment for research and development in the pharma sector.
o As per the new policy, the Department of Pharmaceuticals will have control over the
National List of Essential Medicines (NLEM), which decides the drugs for which the
Government of India can control the prices.
o In November 2019, Cabinet approved the extension/renewal of the extant
Pharmaceuticals Purchase Policy(PPP) with the same terms and conditions while
adding on additional product, namely,Alcoholic Hand Disinfectant(AHD) to the
 existing list of 103 medicines until the final closure/strategic disinvestment of the
Pharma CPSUs

India is the second-largest contributor of global biotech and pharmaceutical workforce

The global pharmaceutical market size in 2020 was estimated at US$1.27 Trillion and is expected to
expand at a compounded annual growth rate (CAGR) of 3-6% to US$1.6 Trillion by 2025

Outside of the US, India has the largest number of USFDA-approved pharmaceutical manufacturing
facilities.

Sun pharma

Sun Pharmaceuticals is the largest pharmaceutical company from India and the fourth largest
specialty generic company in the world with global revenue of over $4.5 billion.It has capabilities
across dosage forms like injectables, sprays, ointments, creams, liquids, tablets, and capsules. Its
businesses include producing generics, branded generics, specialty, over-the-counter (OTC)
products, antiretrovirals (ARVs), active pharmaceutical ingredients (APIs) and intermediates in the
full range of dosage forms. It also produces specialty APIs.

History:

Sun Pharmaceutical Industries Ltd is a multinational pharmaceutical company incorporated in 1983

as a partnership firm by Mr. Dilip Shanghvi & his family. Journey of company

Sun Pharma – Reaching People. Touching Lives.

2021 In September 2021, with the launch of Revital NXT, Sun Pharma Consumer Healthcare, a
division of Sun Pharmaceutical Industries Ltd., announced its entry into the nutrition bar
category in India. Revital NXT, is a brand extension of Revital H, a health supplement.
In June 2021, Sun Pharmaceuticals acquired the patent license for Dapagliflozin from
AstraZeneca. The company will distribute and promote the drug under the brand name
‘Oxra’.
In March 2021, Sun Pharmaceuticals acquired a 12.5% stake in Australia-based WRS
Bioproducts for US$ 1.5 million.
In February 2021, it introduced Brivaracetam, an anti-epileptic drug, in multiple dosage forms, a day
after the patent expiry. This drug was developed by UCB, a Belgian-based firm.
2020 Sun Pharma announced five-year sustained efficacy and safety results for ILUMYA in patients with
moderate-to-severe plaque psoriasis

2019 Sun Pharma and AstraZeneca entered into a license agreement for novel oncology products in China
Sun Pharma’s arm, Sun Pharmaceutical Industries, acquired its remaining 3.04% stake in PJSC
Biosintez, Russia
Sun Pharma and China Medical System Holdings entered into licensing agreement for generic
products in Mainland China

2018 Sun Pharma to acquire Pola Pharma in Japan

2018 Sales of Rs 27,956 crore (US$ 4 billion) in FY18; Announced acquisition of US-based speciality
pharmaceutical company Avenue Therapeutics for Rs 1502.635 crore (US$ 215 million)

2017 Agreement signed with National Institute of Virology, India to fight Zika, Chikungunya and Dengue

2013 Became world’s fifth largest specialty generic pharmaceutical company with acquisition of Ranbaxy

2000 Acquired Pradeep Drug Company

1997 First international acquisition with Caraco Pharmaceutical Laboratories, USA

1996 Sales network expanded across 24 countries

1994 Launched initial public offer (IPO)

1989 Introduced gastroenterology products in India

1983 Established with a portfolio of five psychiatry products

 
Key Performance Indicators
Business Segment
1) US Business (Specialty & Generics)
 Sun Pharma entered the US pharma market—the world’s largest pharmaceutical market—in
1997 and has, since then, established its prominence in the generics market. It subsequently
expanded its portfolio to include specialty branded products and over-the-counter (OTC)
products. It is the tenth-largest pharmaceutical company in the US generics market with the
US business accounting for ~30% of annual consolidated sales. The Company manufactures
and markets various dosage forms, including liquids, creams, ointments, gels, sprays,
injectable, tablets, capsules, and drug-device combination for the US market. It focuses on
the Central Nervous System (CNS), dermatology, cardiology, oncology,
ophthalmic segments, among others in the US.

FY21 Highlights US Business

• Revenues from US de-grew by 4.4% Y-o-Y to ₹100,839 Million

• Despite the significant challenges posed by the COVID-19 pandemic, the specialty branded
business in the US witnessed positive growth, with Ilumya, Cequa, Yonsa and Odomzo being key
contributors

Following the end of FY21, the first generic for Absorica entered the market In April 2021

2) India Branded Generics Business: Largest Pharma Company in India

Sun Pharma is the largest pharmaceutical company in the domestic market with 8.17%
market share and strong positioning in the high-growth chronic segments. It offers a
complete therapy basket, with products in neuro-psychiatry, cardiology, diabetology,
gastroenterology, pain/analgesics, gynaecology, ophthalmology, urology, dermatology,
respiratory, anti-infectives, and other segments.

FY21 Highlights India Business

• Revenue from the India Formulations business grew by 6.5% to ₹103,432 Million, driven mainly by
chronic segments. As per AIOCD AWACS data for the 12 months ended March-2021, average
industry growth was 2.1% with acute and semi-chronic segments getting impacted due to lockdown
restrictions
• Growth was driven by a combination of volume and price progressions

• During the year, we launched 96 products in the domestic market, including the anti-epileptic
Brevipil (Brivaracetam) and FluGuard (Favipiravir)

• The Company supplied drugs like Remdesivir, Itolizumab, Hydroxychloroquine (HCQS), Favipiravir,
and Liposomal Amphotericin B in the Indian market for the treatment of COVID-19 and associated
ailments

• In May 2021, Sun Pharma entered into a licensing agreement with Eli Lilly to expand access to
Baricitinib, in helping alleviate the burden of COVID-19 in India

3)Emerging Markets

Sun Pharma is the one of the leading Indian pharmaceutical companies in the emerging markets. The
Company sells its products in ~80 global markets, with a focus on Romania, Russia, South Africa,
Brazil, Mexico and other complementary and affiliated markets. It has local manufacturing units
across Bangladesh, South Africa, Malaysia, Romania, Egypt, Nigeria and Russia, which provides
increased flexibility in servicing these markets.

FY21 Highlights

• Revenues from emerging markets grew by 5.1% to ₹57,834 Million

• Many emerging market currencies showed higher volatility, given the global impact of the
pandemic in these markets.

4) Active Pharmaceutical Ingredient (API) Business: Strategic Integration

The API business is strategically important for Sun Pharma, as it provides opportunities for strong
backward integration and speed to market. These linkages, in turn, provide cost competitiveness and
a reliable supply chain, thereby reducing the dependence on third-party suppliers. With ~300
offerings in the product portfolio, it caters to large generic manufacturers and innovator companies,
after meeting captive consumption requirements. The Company has 14 API manufacturing units
across multiple countries and develops ~20-30 APIs annually
FY21 Highlights

• Revenue from the API business increased by 1.8% to ₹19,504 Million

• Growth was muted mainly due to lower sales of opiates products

5) Global Consumer Healthcare Business

Sun Pharma is present in countries like Romania, Russia, South Africa, Nigeria, Myanmar, Ukraine,
Poland, Thailand, Belarus, Kazakhstan, Morocco, UAE, and Oman. The Company enjoys strong brand
equity in India, Romania, Nigeria, and Myanmar, with a portfolio, including over-the-counter (OTC)
brands in the Vitamins, Mineral & Supplements (VMS), Cold & Flu, Analgesics, Digestive and
Dermatology categories. As per IQVIA, Sun Pharma’s key consumer healthcare brands – Volini and
Revital H – are ranked 23rd and 63rd, respectively in the Indian pharmaceutical market. The Indian
distribution network spans 1,000+ cities and towns, supported by ~400,000 retail outlets. Globally,
the Company has a strong pharmacy reach in Russia, Romania, Nigeria, and Myanmar for its OTC
brands.

FY21 Highlights

• In India, the consumer business revenue recorded double-digit growth, driven mainly by higher
sales of Revital-H, which was a result of increased consumption of vitamins, given the COVID-19
pandemic.

Sun pharma expanded the launch of Volini Joint Xpert Gel to more locations in the country and
introduced the Abzorb T Cream, which further expands the dermatology portfolio

Growth Strategies
Focus Areas
PORTERS FIVE FORCES ANALYSIS

1)Competitive Rivalry

Growth opportunities for pharma companies are expected to grow in the next few years, with many
drugs going off-patent in the US and other countries, thus increasing competition. Indian pharma
companies will face competition from big pharma companies, backed by huge financial muscle. Due
to the increasing demand for high-quality drugs, the presence of several large and small firms makes
this market highly competitive.

2) Threat of New Entrants

Strict government regulations thwart the entry of new players. It has become very important for
pharmaceutical companies to focus on R&D to sustain their position in the market. The cost
associated with research and development is very high. Also, it is difficult to survive for new entrants
because of the high gestation period. besides this, various other challenges such as drawing up
appropriate distribution strategies, selecting the right products, anticipating competition among
others are limiting the entry of new entrants in the market. Due to these factors, the threat of new
entrants is low.

3)Threat of Substitute Products

The threat of substitute products is low; however, homeopathy and Ayurvedic medicines can act as
substitutes.

4) Bargaining Power of Suppliers

Difficult-to-manufacture APIs such as steroids, sex hormones, and peptides give bargaining power to
suppliers. However, generic APIs do not have much of that power. The bargaining power of suppliers
is low to moderate.

5) Bargaining Power of Customers

Generic drugs offer a cost-effective alternative to drugs innovators and significant savings to
customers. Biosimilars offer significant cost savings for insurance companies in India. There armany
companies in market providing similar products. Bargaining power of customers is moderate to high.
SWOT Analysis