Pharmaceuticals

As one of the fastest growing sectors in India, the pharmaceutical industry is witnessing tremendous growth. According to a report by Visiongain, the market for pharmaceuticals in India is expected to witness strong growth during 2008–2023. The report reveals that healthcare provision in both public and private is improving vastly, resulting in a growing market for healthcare products, particularly modern pharmaceuticals.

The report further states that globally, India is emerging as a competitive player in manufacturing Active Pharmaceutical Ingredients (APIs), generic drugs, intermediates for drug makers, and also new formulations; apart from becoming a major outsourcing hub. Moreover, in addition to marketing pharmaceuticals, Indian firms are also manufacturing for foreign clients as outsourcing to India saves costs and precious developmental time. Furthermore, with the upgradation of their manufacturing plants, many Indian manufacturers have received certifications by the US Food and Drug Administration (FDA), European Directorate for the Quality of Medicines (EDQM), and other regulatory agencies.

Indian biotechnology firms are now providing research and development (R&D) services for global pharma companies for drug discovery and manufacture. Previously, Indian biotech companies merely offered low-level R&D services in drug discovery.

According to a study titled 'The globalization of innovation: Pharmaceuticals, Can India and China cure the Global Pharmaceutical Market' by US-based Ewing Marion Kauffman Foundation, increasing research and development (R&D) initiatives in the pharmaceutical sector has made India a more mature place for drug discovery activities than China. The report stated that Indian companies are playing an important role in early drug discovery processes due to their substantial experience in the field of generic drugs. The study also holds India as a more established venue for chemistry and drug discovery developments than China.

Indian companies like Aurigene, Advinus, Nicholas Piramal and Jubilant have settled long-term deals with foreign pharma companies for developing new chemical entities. "Many drugs from these partnerships are now going into clinical testing", states the study. As a result, R&D would increasingly move to these two countries.

Exports

According to a research report (released in August 2008), "Booming Pharma Sector in India", by RNCOS, (an industry research firm) India is now one of the world's most potential destinations for pharmaceutical exports. The country exported drugs worth US$ 7.2 billion in 2007-08 and the US and Europe was the biggest export destinations for Indian generic manufacturers, followed by emerging markets like Central and Eastern Europe, Latin America and Africa.

The report forecasts that Indian pharmaceutical exports will grow at a compound annual growth rate (CAGR) of 18.5 per cent between 2007-08 and 2011-12. This growth will be in fuelled by multi-billion dollar patent expirations and growth in the global generics market.

Growth

The industry's growth rate is likely to touch 19 per cent from the current 13 per cent, according to a projection released by the Confederation of Indian Industries (CII), on September 1, 2008. The incremental growth of 6.6 per cent will be bolstered by factors like a growing middle class (contributing 2 per cent of the incremental growth), pricing of the pharma products (1 per cent), untapped rural markets (2 per cent), and marketing efficiencies (1 per cent).

According to a McKinsey study, the Indian pharmaceutical industry is projected to grow to US$ 25 billion by 2010 whereas the domestic market is likely to more than triple to US$ 20 billion by 2015 from the current US$ 6 billion to become one of the leading pharmaceutical markets in the next decade.