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Pharmaceutical industry in india


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  • 1. PHARMACEUTICAL INDUSTRY Strategies Submitted by 331 326 001 016 308 Group-3
  • 2. PHARMACEUTICAL INDUSTRY IN INDIA The Pharmaceutical industry in India is the world's third-largest in terms of volume. According to Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, the total turnover of India's pharmaceuticals industry between 2008 and September 2009 was US$21.04 billion.[2] While the domestic market was worth US$12.26 billion. The industry holds a market share of $14 billion in the United States. According to Brand India Equity Foundation, the Indian pharmaceutical market is likely to grow at a compound annual growth rate (CAGR) of 14-17 per cent in between 2012- 16. India is now among the top five pharmaceutical emerging markets of the world. Exports of pharmaceuticals products from India increased from US$6.23 billion in 2006– 07 to US$8.7 billion in 2008–09 a combined annual growth rate of 21.25%. According to PricewaterhouseCoopers (PWC) in 2010, India joined among the league of top 10 global pharmaceuticals markets in terms of sales by 2020 with value reaching US$50 billion. The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970.[5] However, economic liberalization in 90s by the former Prime Minister P.V. Narasimha Rao and the then Finance Minister, Dr. Manmohan Singh enabled the industry to become what it is today. This patent act removed composition patents from food and drugs, and though it kept process patents, these were shortened to a period of five to seven years. The lack of patent protection made the Indian market undesirable to the multinational companies that had dominated the market, and while they streamed out. Indian companies carved a niche in both the Indian and world markets with their expertise in reverse-engineering new processes for manufacturing drugs at low costs. Although some of the larger companies have taken baby steps towards drug innovation, the industry as a whole has been following this business model until the present. India's biopharmaceutical industry clocked a 17 percent growth with revenues of Rs. 137 billion ($3 billion) in the 2009–10 financial year over the previous fiscal. Bio-pharma was the biggest contributor generating 60 percent of the industry's growth at Rs. 88.29 billion, followed by bio-services at Rs. 26.39 billion and bio-agri at Rs. 19.36 billion. In 2013, there were 4,655 pharmaceutical manufacturing plants in all of India, employing over 345 thousand workers.
  • 3. PHARMACEUTICAL INDUSTRY TODAY The number of purely Indian pharma companies is fairly less. Indian pharma industry is mainly operated as well as controlled by dominant foreign companies having subsidiaries in India due to availability of cheap labor in India at lowest cost. In 2002, over 20,000 registered drug manufacturers in India sold $9 billion worth of formulations and bulk drugs. 85% of these formulations were sold in India while over 60% of the bulk drugs were exported, mostly to the United States and Russia. Most of the players in the market are small-to-medium enterprises; 250 of the largest companies control 70% of the Indian market.[9] [10]Thanks to the 1970 Patent Act, multinationals represent only 35% of the market, down from 70% thirty years ago. Most pharma companies operating in India, even the multinationals, employ Indians almost exclusively from the lowest ranks to high level management. Homegrown pharmaceuticals, like many other businesses in India, are often a mix of public and private enterprise. In terms of the global market, India currently holds a modest 1–2% share, but it has been growing at approximately 10% per year. India gained its foothold on the global scene with its innovatively engineered generic drugs and active pharmaceutical ingredients (API), and it is now seeking to become a major player in outsourced clinical research as well as contract manufacturing and research. There are 74 US FDA- approved manufacturing facilities in India, more than in any other country outside the U.S, and in 2005, almost 20% of all Abbreviated New Drug Applications (ANDA) to the FDA are expected to be filed by Indian companies. Growth in other fields notwithstanding, generics are still a large part of the picture. London research company Global Insight estimates that India’s share of the global generics market will have risen from 4% to 33% by 2007. The Indian pharmaceutical industry has become the third largest producer in the world and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion. Product development:Indian companies are also starting to adapt their product development processes to the new environment. For years, firms have made their ways into the global market by researching generic competitors to patented drugs and following up with litigation to challenge the patent. This approach remains untouched by the new patent regime and looks to increase in the future. However, those that can afford it have set their sights on an even higher goal: new molecule discovery. Although the initial investment is huge, companies are lured by the promise of hefty profit margins and has a legitimate competitor in the global industry. Local firms have slowly been investing more money into their R&D programs or have formed alliances to tap into these opportunities.
  • 4. INDIAN PHARMACEUTICAL COMPANIES IMPORTS AND EXPORTS: Imports Exports 0 1 2 3 4 5 6 7 8 9 US$/BN 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Imports 0.48705 0.50252 0.53363 0.76755 0.99722 1.14478 1.47033 1.69303 1.85929 Exports 2.18042 2.58621 2.92876 3.6091 4.36322 4.99018 6.76957 7.21752 8.08367 Source: Ministry of Chemicals & Fertilizers, Department of Pharmaceuticals
  • 6. Ranbaxy Laboratories Ltd. is a research based International pharmaceutical company with its headquarters in India. It manufactures a range of high quality, affordable generic drugs. The company has manufacturing facilities in around 9 countries. It has strong presence in around 49 countries, products available in around 125 countries globally. It has dedicated workforce of about 10,500 employees representing 51 different countries. Formation: Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. The name Ranbaxy is a portmanteau word from the names of its first owners Ranbir and Gurbax. Bhai Mohan Singh bought the company in 1952 from his cousins Ranbir Singh and Gurbax Singh. After Bhai Mohan Singh's son Parvinder Singh joined the company in 1967, the company saw a significant transformation in its business and scale. His sons Malvinder Mohan Singh and Shivinder Mohan Singh sold the company to the Japanese company Daiichi Sankyo in June 2008. Ranbaxy was established in 1961 and went public in the year 1973. It has global sales of US $1340 million for the year ended on 31st December, 2006. It has the largest market in USA (sales appx. US $380 million); then come Europe and BRICS (Brazil, Russia, India, China, South Africa). Company Details: Type - Public Founded - 1961 Headquarters- Gurgaon, Haryana, India Employees - 1100 in R&D Website -
  • 7. MISSION VISION &VALUES Mission: Ranbaxy's mission is „Enriching lives globally, with quality and affordable pharmaceuticals. Vision: Achieve significant business in proprietary prescription products by 2012 with a strong presence in developed markets. Values: a) Achieving customer satisfaction is fundamental to our business b) Provide products and services of the highest quality c) Practice dignity and equity in relationships and provide opportunities for our people to realize their full potential d) Ensure profitable growth and enhance wealth of the shareholders e) Foster mutually beneficial relations with all our business partners f) Manage our operations with high concern for safety and environment g) Be a responsible corporate citizen
  • 8. Working Details: Ranbaxy has a strong R&D competence that provides a sustainable competitive advantage to the company. It has scholarly pool of about 1100 scientists, engaged in out-of-box researches. Ranbaxy spends over 7% of its sales on R&D. Licensing of once-a-day Ciprofloxacin formulation, using NDDS (Novel Drug Delivery System) on a worldwide basis, was the first international success for the company. Ranbaxy is focused on Discovery and development of drugs on anti-infectives, urology, respiratory/ inflammatory and metabolic diseases.  Top 20 Molecules: • Simvastatin • AmoxiClav Potassium • Isotretinoin • Amoxycillin and Combinations • Ciprofloxacin and Combinations • Ketorolac Tromethamine • Omeprazole and Combinations • Cefuroxime Axetil • Cephalexin • Loratadine and Combinations • Clarithromycin • Ginseng+Vitamins • Diclofenac and Combinations • Ranitidine • Cefaclor • CefpodoximeProxetil • Efavirenz • Atorvastatin and Combinations • Fenofibrate • Ofloxacin and Combinations
  • 9. Business Overview: Ranbaxy Laboratories Limited encompasses the entire pharmaceutical value chain from manufacturing to marketing generic pharmaceuticals; value added generic pharmaceuticals, branded generics, Active Pharmaceuticals Ingredients (API) and intermediates. As a research driven company, over 6% of it's revenues are invested in R&D, amongst the pharmaceutical companies in India, Ranbaxy has the largest R&D budget with an R&D spend of over US $ 100Mn. In 2008 it demerged its New Drug Discovery Research division into a separate entity, Ranbaxy Life Science Research Limited (RLSRL). The company has manufacturing operations in eight countries with a ground presence in 49 countries, and its products are available in over 125 countries. It has been aggressively entering into joint ventures and strategically acquiring companies in past few years. Besides concluding its acquisition of Be-Tabs in South Africa, which makes Ranbaxy the 5th largest generic pharmaceutical company in South Africa, the Company acquired 13 Dermatology products from Bristol-Myers Squibb in the USA in 2007. Ranbaxy made an acquisition of RPG Aventis, France which has since been renamed as Ranbaxy PharmacieGeneriques SAS. It also has subsidiaries in Spain, Netherlands, Russia and Australia. Anti-infectivesamoxycillin, ciprofloxacin, and simvastatin are in Ranbaxy's top selling class of medications. In 2007, the company entered the specialty and niche therapeutic areas of Bio-generics, Oncology,Penems, Limuses, Peptides,etc. The company also has a groundbreaking anti-malarial candidate in late-phase trials. Emerging Markets:During 1QCY2009, the CIS region de-grew by 8% yoy to Rs86.5cr primarily on account of currency devaluation and stringent credit management adopted by the company. The Asia-Pacific region recorded Sales of Rs109.2cr growing at 9% yoy. In India, the company’s Sales during the quarter stood at Rs325.8cr, a yoy growth of 9% as the company continues to maintain its second rank in the domestic market with 4.8% marketshare. The company also launched the first product Olvance from Daiichi’s product portfolio. The company also plans to scale up Daiichi’s products in India and other Emerging markets.
  • 10. Business Segments&Strategies: There are three basic business divisions: pharmaceutical dosage forms, active pharmaceuticals ingredients (API) and allied business which comprises of animal healthcare, diagnostics and a range of other products. Of these, the pharmaceutical dosage forms division is the largest sector, accounting for two thirds of annual sales. Dosage Form Sales (94% of total revenue) the dosage form sales grew from 91% of global sales in 2006 to 94% of global sales in 2007. It comprises the majority of Ranbaxy’s sales, including sales of generic pharmaceuticals, value added generic pharmaceuticals and branded generics. API (Active Pharmaceutical Ingredients & Others) (6%) Ranbaxy supplies API to leading generic companies in more than 50 countries. The API division has in its portfolio over 50 products covering a wide therapeutic range such as Cardio-vasculars, Anti- infectives, Anti-ulcerants, Anti-diabetics, Anti-depressants, Anti-virals and others. In 2001 Ranbaxy identified Consumer Healthcare as its new business area with the launch of 4 brands: Revital, Pepfiz, Gesdyp& Garlic Pearls. During 2006, the business registered sales of US $ 19 Mn registering a growth of 19%. Acquisition On June 11 2008, Daiichi-Sankyo acquired a 34.8% stake in Ranbaxy, for a value $2.4 billion. In November 2008, Daiichi-Sankyo completed the takeover of the company from the founding Singh family in a deal worth $4.6 billion by acquiring a 63.92% stake in Ranbaxy. The addition of Ranbaxy Laboratories extends Daiichi-Sankyo's operations - already comprising businesses in 21 countries. For Ranbaxy, the deal frees up its debt and imparts more flexibility into its growth plans. The combined company is worth about $30 billion.
  • 11. Competition The pharmaceutical industry is characterized by rapid advances in scientific knowledge and ability to discover new drugs. The industry is therefore led by large manufacturers and marketers of drugs investing heavily in research & development, having clinical testing, marketing and distributing capabilities. Some of the main competitors of Ranbaxy are: Sun PharamceuticalsIndustires - It is No. 1 in India in speciality therapy areas like psychiatry, neurology, cardiology, gastroenterology, diabetology and respiratory.It has brands in 30 markets worldwide and also has a generic presence in the U.S. with Caraco Pharm Labs, Sun Pharmaceutical Industries Inc (subsidiary). Cipla - Cipla is a leader in the domestic retail pharmaceutical market. It also exports raw materials, intermediates, prescription drugs, over-the-counter products, and veterinary products to some 180 countries around the world. GlaxoSmithKline - It is one of the oldest pharma companies in India and with a turnover of Rs. 1500 crore is one of the market leaders(market share) in India with a share of 6.2 per cent. Its main portfolios consist of anti- infectives, dermatologicals and pain management drugs. Dr. Reddy's Laboratories - It is a global pharmaceutical company with it's headquarters in India and a presence in more than 100 countries.
  • 12. RECOMMENDATIONS/SUGGESTIONS  Marketing Strategies : Increase sales  Reduce R&D costs.  Opening own exclusive Retail Outlets.  Any Time Medicines (ATM).  Outsourcing by forming alliance with companies like Pfizer, which is the market leader in drug manufacturing globally.  Outsourcing saves a lot of money when done in countries like India as it has many scientists and thus very cost effective.  Forming local mergers with companies like Alkem laboratories which meet the requirements for forming an alliance with this company in terms of the drugs that they manufacture.  Tie ups with multimedia companies as they play a huge role in the marketing of the products which involves advertising, signboards etc.  Come out with exclusive drugs to tackle epidemic diseases, like H1N1, Chikungunia.  Developing drugs for Cancer, Brain Tumor and AIDS.  Development of Hospitals: Fortis and expanding its centers.  Tie-ups with Government: Government Hospitals.  Exclusive Medical Representatives.