Pharmaceutical Industry in India is one of the largest and most advanced among the developing countries. Around 70% of the countrys demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and vaccines is met by IPI. The Indian pharmaceutical industry has come a long way from waiting for imports of bulk drugs from global players to breaking new grounds in medical research worldwide.
Phase V Phase IV Innovation and Growth Phase Research Phase III Development •Rapid expansion of •New IP law Phase domestic market •Discovery Research Phase II •Process •International •Convergence Government Control development marketPhase I development •Indian Patent Act – •ProductionEarly Years 1970 infrastructure •Research orientation•Market share •Drug prices capped creationdomination by •Local companies •Export initiativesforeign begin to make ancompanies impact•Relativeabsence oforganized Indiancompanies 1970 1980 1990 2000 2010
VALUE Innovative Products Specialty Generic Generic Products exports to exports to developed under- countries developed & API developing Exports countries TIME
Pharmaceutical Industry Two percent of the worlds pharmaceutical market. Estimated market value of about US $12.26 billion. 3rd rank in terms of total pharmaceutical production volume. 14th in terms of value. Growing at an average rate of 8-9 %. Expected to grow to US $ 20-23 billion by 2015. The pharmaceutical industry grows at about 1.5-1.6 times the Gross domestic product growth.
INDIAN PHARMACEUTICAL MARKET DOMESTIC MARKET OVERSEAS MARKET Ethical drugs The Export generic drugs Over the counter (OTC) and APIs drugs Contracted Research and Active pharmaceutical Manufacturing Services ingredient (API) market (CRAMS)
A patent is a limited monopoly granted in respect of an invention. A patent confers the right to exclude others from making, using or selling the invention. This right is granted to the inventor (or his/her successor in title) by a national or regional authority. This right is limited in terms of territory and duration. The scope of this right is defined by the patent claims.
A patent does not confer the "positive" right to use the invention. The use of an invention, whether patented or not, is subject to other national laws and regulations.
Territorial scope : • National patents – Both granting procedure and effect are national. • European patents - The granting procedure is European, the effect is national • International patent applications (PCT): The application and examination procedure is international, the granting procedure is European/national, the effect is national. Term • 20 years from filing
• Product Broadest protection. It covers all uses of the product, even those not explicitly disclosed.• Method The protection for a method of manufacture also covers the products obtained by that method. Relatively narrow scope of• Use protection - second medical use
Generic medications are: A copy of the original (bioequivalent) and interchangeable with the innovator drug. Manufactured without a license from the innovator company. Marketed after expiry of patent or other exclusive rights .
Patented Off Patent Product Introductory Growth Maturity DeclineDevelopment Stage Stage Stage Stage Off Patent Scenario A Scenario B Scenario C Time
MAJOR PLAYERS AS PER NET SALES IN INDIA90008000 7686.59 6977.5 IN CRORE7000 6686.36000 5364.375000 4284.63 4015.564000 3152.23000 2641.07 2560.16 2352.5920001000 0 COMPANY
CURRENT GROWTHSCENARIOFACTORS LEADING TO THE GROWTH OFPHARAMACEUTICAL INDUSTRY Economic Growth Population growth Increase in chronic diseases Healthcare infrastructure growth Growth of health insurance Low manufacturing costs
4000035000 34741 US $ IN MN(APR 2011- MAR 2012)300002500020000 1685715000 12931 8589 915110000 7942 5769 5000 2702 2411 1778 0 COUNTRY
SRILANKA 6% SOUTH AFRICA UNITED 10% STATES 20%MEXICO 8%PAKISTAN GERMANY 7% 17% BRAZIL UNITED 10% KINGDOM INDIA CHINA 9% 8% 5%
EFFECT OF RECESSION• Recession Proof Business.• Career in the pharmaceutical industry as evergreen.• Fastest growing manufacturing industries.
Contract manufacturing for Global Supply of APIs Quality Generic Products Process Technologies Pharmaceutical Manufacturing Equipment Alternate Medicines - Ayurvedic & Herbal
SWOT ANALYSIS STRENGHTS WEAKNESSES•Cost Competitiveness •Low investments in innovative R&D•Strong manufacturing base •Lack of resources to compete with•Established network of laboratories and R&D MNCs infrastructure•Highly trained scientists •Inadequate regulatory standards•Strong marketing and distribution network •Production of spurious and low quality•Rich biodiversity drugs spoils the image of the industry in•Largest number of US FDA approved plants international arena Opportunities Threats •Product patent regime poses serious •Significant export potential challenge unless it invests in R&D •Licensing deals with MNCs •DPCO puts unrealistic ceilings on •Marketing alliances to sell MNC products product in Indian market prices & profitability & prevents in •Contract manufacturing agreements with generating investible surpluses the MNCs •Export effort hampered by procedural •Potential for developing India as a centre hurdles & non tariff barriers imposed for international clinical trials abroad •Lowering of tariff protection
FINDINGS AND CONCLUSION• Expected to grow to US $ 20-23 billion by 2015.• Export market is growing much faster than the domesticmarket.• Future will see strong growth in the specialty brandedgenerics and patented drug segments.• Drugs for diabetes and cardiovascular diseases are expectedto see the fastest growth among all therapy areas .
• Vast opportunity exists for the organized market.• Cipla, Ranbaxy and GlaxoSmithKline are controlling the top three positions in the Indian pharmaceutical market.• Pharma industry being a growth industry unaffected by the business cycle• India has: Competitive strength in research services. Availability of low cost skilled doctors and scientists. Large patient population with diverse disease characteristics.• VLSS agencies recommends investment in this industry to be a wise decision.
RECOMMENDATIONS• Selecting right product-mix.• Focusing on core competencies.• More of merger and acquisition.• Reengineering and investing heavily in R&D.• Advances in biotechnology and Information technology.
• The obligations imposed on India are going to have a significant impact on India’s successful bulk and formulation-oriented pharmaceutical industry.• Indian companies could focus on producing patented drugs under license from foreign companies .