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EXTERNAL ANALYSIS FOR INDIAN PHARMACEUTICAL INDUSTRY

9-Mar-12

By 2     Kranthi Kiran P Krishna Chaitanya P Raviteja Ch Aditya B 9-Mar-12 .

Introduction 3    The marketplace for this industry is the human body – but only as long as it holds diseases. the eradication of diseases is by it’s very nature opposed to the interests of the pharma investment industry. A key strategy to improve profits is to develop drugs that simply mask the symptoms while avoiding the cure!! The worst part is that. 9-Mar-12 .

4th largest in terms of volume. Leading 250 pharmaceutical companies control 70% of the market. 9-Mar-12 .000 registered manufacturing units. Highly fragmented with more than 20.Overview about Indian Pharma Industry 4      World’s 13th largest in terms of value. Market leader holds only 7% of the market share.

15 5 9-Mar-12 .

Product Patent Regime(2005) NPPA   Research Oriented Product Patent Regime(2005)   Limited Customer Choice End-user different from influencer  Highly dependent on development of Health Infrastructure 9-Mar-12 .Overview about Pharma 6 Industry    Highly Regulated Patent Act (1970).

7 STRATEGIC GROUP MAPPING 9-Mar-12 .

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000 different players. Top player in the country has only 7% market share and top five have 20%. High growth prospects.Industry Competition/Rivalry 10     Most competitive industry in the country with as many as 20. 9-Mar-12 . Even though need for working capital is high. patents for generic drugs are available easily and it does not require skilled personnel.

Has remained the same even after 2005. 9-Mar-12 .Rivalry is mainly due to cost competitiveness. Has increased after 2005.Continued… 11     Generic drugs . Patented drugs – Rivalry due to product differentiation.

Can be slightly higher in case of generic drugs. 9-Mar-12 .Bargaining Power of Buyers 12     End user of the product is different from the influencer. Consumer has no choice but to buy what doctor says. Buyers are scattered and they as such does not wield much power in the pricing of the products.

Very competitive and fragmented industry. Chemicals are largely a commodity. Can be slightly higher in case of patented drugs.Bargaining Power of Suppliers 13      Pharma industry depends upon several chemicals. 9-Mar-12 . Pharma industry can switch from their suppliers without incurring a very high cost.

Supplier can go for forward integration to become a pharma company. thus providing an opportunity for new entrants. creating a regional distribution network is easy. The bigger players are moving towards R&D. 9-Mar-12 .Threat of new entrants(Generic drugs) 14     Most easily accessible industries for an entrepreneur in India. Capital requirement for the industry is very low.

The field of discovery and developments of new chemical entity (NCEs). 9-Mar-12 .Threat of new entrants(Patent drugs) 15    Very high capital and skill required. had more misses than hits and very few discoveries reach the final stages of approvals Established firms will make it very difficult for a new entry.

“Home remedies” 9-Mar-12 . Demand for pharma products continues and the industry thrives. Recent improvements in biotechnology and biopharmaceuticals can prove to be a threat.Threat of Substitutes 16     One of the great advantages of the pharma industry is that it is almost irreplaceable.

CONSOLIDATED ANALYSIS 17 9-Mar-12 .

The big players narrowed their focus onto high-end customers who make up only 12% of the market. Meanwhile. taking advantage of their newly bestowed patent protection.Conclusion 18    In the domestic market. the smaller firms have chosen to take their existing product portfolios and target semi-urban and rural populations 9-Mar-12 . the new patent legislation resulted in fairly clear segmentation.

19 THANK YOU 9-Mar-12 .

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