Indian pharmaceutical market outlook enhanced purchasing power

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Indian pharmaceutical market outlook enhanced purchasing power

  1. 1. Indian Pharmaceutical Market Outlook -Rural Market Penetrationand Expanded Access To Healthcare Attracting Big Pharma Investment ,Enhanced Purchasing Power   Anil kumar Registration No. -12PMM382 MBA (Pharm),DOPM NIPER(Moha
  2. 2.  The Indian Pharmaceutical Industry is ranked 3rd globally in volume and 14th in value, supplying around 10% of total global production  India is among one of the largest bulk drug exporter but represent only one fourth of the total pharmaceutical market while formulation drugs account for the three fourth share Source: BMI, Datamonitor, Various industry estimates, Aranca Research
  3. 3.      Top 23 cities 25% of Pharma sales of which the Tier‐I towns One third of the total sales and Tier‐II cities (population less than one lac) including the rural Domestic market accounting for about 40% of market share 30% annually growth increase This increase in the growth is catching attention of the major companies who are now focusing on them for future growth In terms of global export of herbs, India account for 9.10% of the market share Domestic market size to be US$12 billion. We estimate that by 2020 it will grow to US$49 billion
  4. 4.  There has been a consistent growth in the total healthcare spending in India with an estimated 4.20% of GDP spent on healthcare through 2008-10. Pharmaceutical industry contributed 1.71% of GDP in 2011  Pharmaceutical industry (domestic, import and export) by value reached USD 27.40 billion, growth of 13.22% from previous year
  5. 5. Biopharma segment growing at a CAGR in the range of 10-13% over the next 10 years to reach a size between US$1.4 billion and US$1.8 billion by 2020, vaccine segment (human and animal) witnessed growth of 11.21% Bulk drug segment registering a growth of 6.41%. This segment is further expected to grow at CAGR of 14.80% (2011-2016) and it will be of US$ 20 billion size by 2015 Vitamins and minerals is a rapidly growing category which was the fifth largest therapeutic segment in 2011 Source: BMI, Datamonitor, Various industry estimates, Aranca
  6. 6. The Indian generic drug market is projected to grow at a CAGR of around 11.13% during 2011-2016 from 9.69% (2010-2011) Contract research and manufacturing services (CRAMS) Market size USD2.5 billion as of 2009 Fragmented market with more than 1000 players Expected market size of over USD9 billion by 2014 The herbal supplements market in the country reached at a growth of 6.44US$ from previous year and is further expected to grow at a CAGR of 2.44% by 2015 The OTC market was worth about US$1.8 billion in 2010 and it is estimates that by 2020, it will grow to US$11 billion - a CAGR of 18%,with the potential to reach US$13 billion– at an aggressive CAGR of 20%.
  7. 7.  India's own market is increasing, which is being penetrated by high technology products beyond off-patent small molecules such as  Biosimilars sales in India are around $200 mn in 2010, and expected to grow to $580 mn by 2013 Source: IMS Health, Market Prognosis
  8. 8. Government affairs  Pricing functions However, government affairs and pricing functions can play a very important role in the Indian scenario with India investing enormously in   healthcare infrastructure The Government has been inviting Public Private Partnerships (PPP) The Government of India is increasingly investing to improve the healthcare infrastructure in India, hence government affairs today Source: Emkay research (August, 201
  9. 9.         Indian Pharma industry has always been a leading industrial sector of the country, with a paralleled dominance of both domestic and foreign pharma companies Growth of the industry can be attributed by prominent factors Growing middle class population Rapid urbanization Increase in lifestyle-related diseases Increasing issuance of health insurance Generics is emerging as one of the leading segments The Indian pharmaceutical Industry is driven by knowledge, skills, low production costs, quality
  10. 10.  The focus of the industry will shift towards capitalizing the potential of tier-III and rural areas. Emerging sectors, such as biogenerics and pharma packaging will also pave way for the pharmaceutical market to continue its upward trend during the forecast period  India has the maximum number of diabetic patients in the world after China, and communicable diseases like malaria and tuberculosis  Hospital services is one of the fastest growing segments Source: Emkay research (August, 2010
  11. 11.    Some of the fastest growing therapeutic segments Anti-diabetic segment-29% Cardio-vascular medication and nervous system disorder medication - 22% Indian population spent 7% of its disposable income on healthcare in 2005 but ,13% by 2025
  12. 12. 34% 13% 2020 (forecast) 2009-10 11.7% 2007-08 Source: Economic Times (April 2009), PwC analysis
  13. 13. source-IDFC Institutional Securities, Indian Pharma
  14. 14.  Indian Pharma market is predominantly a branded generics market Other drugs 10% 10% Branded generics 90% 90%
  15. 15. Wider distribution channel Companies can sell their products outside of pharmacies, for example in post-offices and department stores Direct to consumer advertisem ents . The government allows public advertising of these products, giving drug makers greater freedom to use more Creative methods while marketing their products.Magic Remedies (ObjectionableAdvertisme nts) act prescribes a negative list of disease for which medication cannot be publicly advertised Increased consumer awareness There is an increased Reliance on selfmedicationas public awareness of Common ailments goes up Low price controls Other than acetylsalicylic acid and ephedrine and its salts, very few of the OTC active ingredients fall under the current DPCO Other than acetylsalicylic acid controls. price and ephedrine and its salts, very few of the OTC active ingredients fall under the current DPCO price controls Source: PwC Analysis, Primary Researc
  16. 16.  Indian companies that manufacture and sell OTC products eg. Cipla, Ranbaxy and Zydus Cadila eg. Novartis, Pfizer and Johnson & Johnson
  17. 17. 91% 91% Retail Retail 9% Instit ution al 88% Retail 12% Institu tional
  18. 18.       Create demand by increasing awareness and education Work with the government through public-private partnerships (PPP),in order to improve infrastructure conditions Mobilize primary care givers and paramedics through health and diagnostic camps Bring specific product solutions to the market and use local languages Improve accessibility of medicines by innovative distribution channels Make products affordable, through appropriate pricing and packaging Source: Novartis, Arogya Parivar: Health for the poor 2010
  19. 19. 27 Cities (11%) 398 Towns (9%) 4,738 Periurban (13%) 600,000 Villages (67%) Bottom of the Pyramid Source:: Health for the poor (April 2010)
  20. 20. Low government spend on healthcare Poor Infrastructure Limited affordability Low awareness of diseases and possible treatment Poor basic hygiene and living conditions Source: Novartis, Arogya Parivar: Health for the poor 2010-2011
  21. 21. Population Rural (72%) 742 million papulation •Hospital % 69 Urban (28%) 285 papulation Million 31 • Hospital Bed% 80 20 • Doctors % 92 08 •Doctors/100,000 50 •Spurious 20-25 people Pharma sales 05 % 75-80
  22. 22.  According to estimates of the planning commission, village dwellers have started spending 12% of their household income on healthcare This has resulted in a spurt of Pharma companies targeting this market Source: IDFC India research, MNC Pharma: New Avatar
  23. 23.  Arogya Parivar is a social innovation to improve healthcare for the poor in rural by promoting disease prevention through a healthy lifestyle and laying focus on Community Education  It also aims to form partnerships with NGOs & healthcare companies to implement a complete healthcare program
  24. 24.     Elder Pharmaceutical ltd. Setup a dedicated division called “Elvista” Nicholas Piramal it has tied up with sorento healthcare communication of epilepsy outreach program launched under the banner “reach more teach more” Ajanta Pharma it use stalls at fairs ,moving van he also educates tertiary health workers who works in small villages Ranbaxy “viraat”
  25. 25. Medical care providers: physicians, specialist clinics, nursing homes and hospitals; Medical equipment manufacturers Diagnostic service centers and pathology laboratories Pharmaceutical manufacturers Third party support service providers (catering)
  26. 26. Source: Consolidated FDI Policy, DI
  27. 27. PRIVATE PUBLIC Source: Cygnus Indian Healthcare Overview Repo
  28. 28. Apollo Hospitals The Escorts Group Fortis Healthcare Arvind Eye Hospital Key Players in the Healthcare Segment Max Healthcare Wockhardt Manipal Health Systems
  29. 29.      Atlas Medical Software Bayer Diagnostics General Electricals and Bharat Electronics Limited Isoft Group plc (iSOFT) Siemens
  30. 30.    Subsidizing drugs for target population group - Ensuring use of drugs for high priority services and drugs for diseases of public health importance (such as TB) (e.g. Bitran and Giedion) Government agencies, whether central or local, tend to provide subsidies for health services For a number of diseases of public health importance are waived except the cost of prescribed drugs, i.e. meningitis, cholera, malnutrition, typhoid, rabies and 18 other diseases Sources: UNDP, HDR, and WH
  31. 31.    Targeting of geographical areas-There may be considerations given to the geographical distribution of drugs and larger share often tend to go to hospitals Currently budgets are often historically determined rather than related to need. One way of targeting drugs to the poor could be to ensure that deprived regions get preferential allocations of drugs reflecting their needs for drugs Promoting rational prescribing- Because of the information asymmetry between the patient and the provider regarding how the welfare of the patient will be affected by treatment alternatives, the provider remains in control of the decision over treatment strategy Prescribers are therefore an important target group for improving rational use of drugs
  32. 32.  Promoting adequate patient use of drugs-Poor people more often than rich people turn to self-medication or traditional healers to save costs Inappropriate use of self-medicated drugs or lack of compliance on the part of patients is a problem for achieving the potential gains related to the expenditures on drugs or avoid cash demands
  33. 33.   “Having considered the market access landscape, successful strategies and having discussions with Indian Market Access leaders, it can be concluded that India is a market with tremendous potential that cannot be ignored While a rising per capita income provides an opportunity for global companies to launch their premium products, lack of a public reimbursement system calls for a careful pricing strategy”

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