The Indian pharmaceutical market is growing rapidly due to factors such as increased healthcare spending, rising incomes, and expansion of healthcare access in rural areas. Rural and tier 2/3 cities now account for a significant portion of sales and are attracting major companies to target this segment for future growth. The market is expected to continue growing at double-digit rates annually to reach $49 billion by 2020, up from the current $12 billion. The growth is being driven by increased demand for generics and chronic disease treatments amid India's growing and aging population.

1. Indian Pharmaceutical Market Outlook -Rural Market
Penetrationand Expanded Access To Healthcare Attracting
Big Pharma Investment ,Enhanced Purchasing Power

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Anil kumar
Registration No. -12PMM382
MBA (Pharm),DOPM NIPER(Moha

3. 
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

4. 




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

5. 
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

6. 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

7. 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%.

8. 
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

11. 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

12. 







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

13. 
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

14. 


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

15. 34%
13%
2020 (forecast)
2009-10
11.7%
2007-08
Source: Economic Times (April 2009), PwC analysis

16. source-IDFC Institutional Securities, Indian Pharma

17. 
Indian Pharma market is predominantly a branded generics market
Other drugs 10%
10%
Branded generics 90%
90%

18. 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

19. 
Indian companies that manufacture and sell OTC products
eg. Cipla, Ranbaxy and Zydus Cadila
eg. Novartis, Pfizer and Johnson & Johnson

20. 91%
91% Retail
Retail
9%
Instit
ution
al
88% Retail
12%
Institu
tional

21. 





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

22. 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)

23. 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

24. 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

25. 
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

26. 
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

28. 



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”

29. 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)

30. Source: Consolidated FDI Policy, DI

31. PRIVATE
PUBLIC
Source: Cygnus Indian Healthcare Overview Repo

32. Apollo
Hospitals
The
Escorts
Group
Fortis
Healthcare
Arvind Eye
Hospital
Key Players
in the
Healthcare
Segment
Max
Healthcare
Wockhardt
Manipal
Health
Systems

33. 




Atlas Medical Software
Bayer Diagnostics
General Electricals and Bharat Electronics Limited
Isoft Group plc (iSOFT)
Siemens

34. 


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

35. 


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

36. 
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

37. 

“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”