Indian pharmaceutical industry Overview and Analysis 2018 PDF PPT is now here ready for you to have a glance. The Indian pharmaceuticals market is the next biggest concerning quantity and thirteenth largest concerning value, according to a report by Equity Master. India is the biggest provider of generic medications internationally using all the Indian generics accounting for 20 percent of global exports concerning volume. Naturally, consolidation is now a significant feature of the Indian pharmaceutical marketplace as the business is extremely fragmented.
India enjoys a significant position in the worldwide pharmaceuticals sector. The nation also has a huge pool of engineers and scientists having the capability to steer the business forward to a much greater degree. Currently over 80 percent of these antiretroviral drugs used worldwide to fight AIDS (Acquired Immuno Deficiency Syndrome) are provided by Indian pharmaceutical companies.
- The pharmaceutical industry in India ranks 3rd in the world terms of volume and 14th in terms of value.India’s cost of production is nearly 33 per cent lower than that of the US
- Labour costs are 50–55 per cent cheaper than in Western countries. The cost of setting up a production plant in India is 40 per cent lower than in Western countries
- Cost-efficiency continues to create opportunities for Indian companies in emerging markets & Africa
- India has a skilled workforce as well as high managerial & technical competence in comparison to its peers in Asia
- India has the 2nd largest number of USFDA-approved manufacturing plants outside the US
- India has 2,633 FDA-approved drug products. India has over 546 USFDA-approved company sites, the highest number outside the US
Growing per capita sales of pharmaceuticals in India offers ample opportunities for players in this market
Per capita sales of pharmaceuticals expanded at a CAGR of 17.6 per cent to US$ 33 in 2016
Economic prosperity would improve affordability for generic drugs in the market & improve per capita sales of pharmaceuticals in India
The UN-backed Medicines Patent Pool has signed six sub-licences with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing them to make generic anti-AIDS medicine TenofovirAlafenamide (TAF) for 112 developing countries.
Present Indian Pharma Industry Scenario
The Indian pharma industry, which is expected to grow over 15 per cent per annum between 2015 and 2020, will outperform the global pharma industry, which is set to grow at an annual rate of 5 per cent between the same period!. The market is expected to grow to US$ 55 billion by 2020, thereby emerging as the sixth largest pharmaceutical market globally by absolute size, as stated by Mr Arun Singh, Indian Ambassador to the US. Branded generics dominate the pharmaceuticals market, constituting nearly 80 per cent of the market share (in terms of revenues). The sector is expected to generate 58,000 additional job opportunities by the year 2025. *
India’s pharmaceutical exports stood at US$ 16.4 billion in 2016-17 and are expected to grow by 30 per cent over the next three years to reach US$ 20 billion by 2020, according to the Pharmaceuticals Export Promotion Council of India (PHARMEXCIL).
Indian companies & Approvals:
Indian companies received 55 Abbreviated New Drug Application (ANDA) approvals and 16 tentative approvals from the US Food and Drug Administration (USFDA) in Q1 of 2017. The USFDA approvals are expected to cross 700 ANDA in 2017, thereby recording a year-on-year growth of 17 per cent. The country accounts for around 30 per cent (by volume) and about 10 per cent (value) in the US$ 70-80 billion US generics market.
India’s biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry and bioinformatics is expected grow at an average growth rate of around 30 per cent a year and reach US$ 100 billion by 2025. Biopharma, comprising vaccines, therapeutics and diagnostics, is the largest sub-sector contributing nearly 62 per cent of the total revenues at Rs 12,600 crore (US$ 1.89 billion).
Indian Pharma Industry Investments:
The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 per cent under the automatic route for manufacturing of medical devices subject to certain conditions.
The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 14.71 billion between April 2000 and March 2017, according to data released by the Department of Industrial Policy and Promotion (DIPP).
Major investments in Indian pharmaceutical Sector:
Indian pharmaceutical firm, Eric Lifesciences Pvt Ltd, has launched its initial public offering (IPO) worth Rs 2,000 crore (US$ 311 million) in June 2017.
Indian pharmaceutical company, Cadila Healthcare Ltd, is planning to raise Rs 1,000 crore (US$ 155 million) via a qualified institutional placement (QIP) of shares shortly.
Capital International Group, a private equity fund, has acquired a three per cent stake in Intas Pharmaceuticals Ltd from ChrysCapital Llc for a consideration of US$ 107 million, thereby valuing Intas Pharma at approximatively US$ 3.5 billion.
Aurobindo Pharma Ltd, has acquired four biosimilar products from Swiss firm TL Biopharmaceutical AG, which will require TL Biopharmaceutical to supply all the developmental data for four molecules, which will be developed, commercialised and marketed by Aurobindo Pharma
Piramal Enterprises Ltd acquired a portfolio of spasticity and pain management drugs from UK-based specialty biopharmaceutical company Mallinckrodt Pharmaceuticals, in an all-cash deal for Rs1,160 crore (US$ 171 million).
Aurobindo Pharma has bought Portugal based Generis Farmaceutica SA, a generic drug company, for EUR 135 million (US$ 144 million).
Sun Pharmaceutical Industries Ltd, India’s largest drug maker, has entered into an agreement with Switzerland-based Novartis AG, to acquire the latter’s branded cancer drug Odomzo for around US$ 175 million.
Kedaara Capital Advisors LLP, a private equity (PE) firm, plans to invest Rs 430 crore (US$ 64.5 million) to acquire a minority stake in Hyderabad-based diagnostics chain Vijaya Diagnostic Centre Pvt Ltd.
Sun Pharmaceuticals Industries Limited plans to acquire 85.1 per cent stake in Russian company Biosintez for US$ 24 million for increasing its presence in Russia through local manufacturing capability.
Abbott Laboratories, a global drug maker based in US, plans to set up an innovation and development center (I&D) in Mumbai, which will help in developing new drug formulations, new indications, dosing, packaging and other differentiated offerings for Abott’s global branded generics business.
Indian Government in Indian Pharma Sector:
The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programme, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.
The implementation of the Goods and Services Tax (GST) is expected to be a game-changer for the Indian Pharmaceuticals industry. It will lead to tax-neutral inter-state transactions between two dealers, thereby reducing the dependency on multiple states and increasing the focus on regional hubs. It is expected to result in an efficient supply chain management, which is expected to reduce its cost considerably. The cost of technology and investment is expected to reduce on account of tax credit which can be availed now on the duties levied on import of costly machinery and equipment.
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Pharma Vision 2020:
Some of the initiatives taken by the government to promote the pharmaceutical sector in India are as follows:
The Government of India unveiled ‘Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments.
The government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.
Mr Ananth Kumar, Union Minister of Chemicals and Petrochemicals, has announced setting up of chemical hubs across the country, early environment clearances in existing clusters, adequate infrastructure, and establishment of a Central Institute of Chemical Engineering and Technology.
Future Indian pharmaceutical market:
The Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025, driven by increasing consumer spending, rapid urbanisation, and raising healthcare insurance among others.
Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise.
Exchange Rate Used: INR 1 = US$ 0.0155 as on June 20, 2017.
Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP), Press Information Bureau (PIB), Media Reports, Pharmaceuticals Export Promotion Council
Note: ! – According to a study by UBM India, the Indian arm of London-based media and events company; * – According to IIHMR University, Jaipur.