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Mera medicare


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Mera medicare

  1. 1.
  2. 2. Contents • Introduction to Indian Pharma Industry • Structure of Pharma Sector In India • About the company • Advantage in India • SWOT Analysis • Porter’s five forces • Legal Framework
  3. 3. Introduction-Indian Pharma Industry Indian pharmaceuticals retailing market is expected to grow at a CAGR of 5% by 2020 driven by the aging and growing population, rising income levels, emerging medical conditions and new diseases, finds a new research report launched by NOVONOUS The pharmaceuticals retailing market in India is largely unorganized and fragmented. The market is wide spread within the urban landscape while the rural area is largely underserved. This is compounded by the fact the Indian pharmaceuticals retail industry uses elongated logistics and distribution chains resulting in poor management and sometime counterfeiting.
  4. 4. Structure of Pharma Sector In India Pharmaceuticals Active Pharmaceuticals Ingredients/Bulk Drugs Branded Generics Formulations Chronic Acute  Cardiovascular  Anti-diabetes  Gastrointestinal  Neurological  Anti-infectives  Respiratory  Pain  Gynaecology
  5. 5. About the company Mera Medicare, an e-commerce portal for generic medicines, aims to provide cheaper drugs At present, they have close to 5000 registered patients and more than 250 pharmacies in their network. After deliberating and researching various aspects of running an e-commerce business in the pharmaceutical industry, Madhu and Pankaj finally started up in July 2014. For every medicine, customers can buy either branded or generic versions. While branded medicines cost more, generic medicines are cheap in comparison with the same benefits. The company has its presence in Delhi, Noida, Gurgaon and Bangalore.
  6. 6. Advantage in India Cost efficiency • Low cost of production and R&D boosts efficiency of Indian pharma companies • India’s cost of production is approximately 60 per cent lower than that of the US and almost half of that of Europe. • Due to lower cost of treatment, India is emerging as a leading destination for medical tourism Economic drivers • Economic prosperity to improve drug affordability • Increasing penetration of health insurance • With increasing penetration of chemists, especially in rural India, OTC drugs will be readily available Diversified portfolio • Accounts for over 10 per cent of the global pharmaceutical production • Over 60,000 generic brands across 60 therapeutic categories • Manufactures more than 500 different APIs • 49 per cent of all drug master filings from India is registered in the USA Policy support • Government unveiled „Pharma Vision 2020‟ aimed at making India a global leader in end-to-end drug manufacture • Reduced approval time for new facilities to boost investments • In this sector, 100 per cent FDI is allowed under automatic route
  7. 7. Pharmaceuticals industry in India Anti-Infective Drugs lead the Pharma market
  8. 8. Indian Pharma Industry Overview
  9. 9. Strengths • Higher GDP growth leading to increased disposable income in the hands of general public and their positive attitude towards spending on healthcare. • Highly skilled set of labor force and proven track record in design of high technology manufacturing devices. • Demographic potential • Well established R&D facilities. • Low cost of labor, innovation, manufacturing and operations. • Property rights supported by well-developed judicial system.
  10. 10. Weaknesses • Stringent pricing regulations affecting the profitability of pharma companies. • Poor all-round infrastructure is a major challenge. • Presence of more unorganized players versus the organized ones, resulting in an increasingly competitive environment, characterized by stiff price competition. • Poor health insurance coverage. • Inadequate emphasis on Biosciences in education system leading to slower development in areas related to Biology giving away advantage to China. • India has a low level of government spending on healthcare, at 1% of the GDP • Competency in API/Formulation, intellectual property creation, facility design and maintenance, global regulatory and legal affairs, and managing international work force is limited to a few players among the big players
  11. 11. Opportunity • Opening of the health insurance sector and increase in per capita income - the growth drivers for the pharmaceutical industry • India, a potentially preferred global outsourcing hub for pharmaceutical products due to low cost of skilled labour. • Health insurance is growing. • Global demand for generics rising. • The government is increasing spend on healthcare • Indian population is spending an increased amount of money on healthcare, Changing disease profile and favorable demographics • Increased penetration in the non - metro markets • Significant investment from MNCs • Public-Private Partnerships for strengthening infrastructure • Exports have grown very significantly at around 19% CAGR • India has a very high potential for developing as a center for international clinical trials due to its rich diversity • There is a possibility of greater returns from an Indian entry into mature markets like Brazil, Japan, Russia, etc • Rapid urbanization -Around 742 million people reside in rural areas. There is a significant gap between the number of people residing in villages that require treatment, and quality treatment and medicines reaching these villages
  12. 12. Threats • Other low-cost countries such as China , Thailand and Israel affecting outsourcing demand for Indian pharmaceutical products • Skilled Labour shortage • Wage inflation • Government expanding the umbrella of the Drugs Price Control Order (DPCO) • Competition from other emerging economies • Entry of foreign players (well-equipped technology-based products) into the Indian market. • Product patent regime poses serious challenge to domestic industry unless it invests in research and development. • Mergers and acquisitions by foreign companies particularly multinational corporations of a few Indian generic leaders may completely change the direction of India’s pharmaceutical movement neutralizing its thrust on generics and cost competitiveness
  13. 13. Generics form the largest Indian Pharma sector With 72 per cent of market share (in terms of revenues), generic drugs form the largest segment of the Indian pharmaceutical sector India’s generic drugs account for 20 per cent of global exports in terms of volume, making the country the largest provider of generic medicines globally and expected to expand even further in coming years Over the Counter (OTC) medicines and patented drugs constitute 19 per cent and 9 per cent, respectively, of total market revenues
  14. 14. Porters Five Forces Competitive Rivalry • Growth opportunities for pharma companies are expected to grow in next few years, with many drugs going off-patent in the US and other countries, thus increasing competition • Indian pharma companies will face competition from big pharma companies, backed by huge financial muscle Threat of New Entrant • Strict government regulations thwart entry of new players • Difficult to survive because of high gestation period Bargaining Power of Suppliers • Generic drugs offer a cost effective alternative to drugs innovators and significant savings to customers • Biosimilar offer significant cost saving for insurance companies in India Bargaining Power of Customers • Difficult-to-manufacture APIs such as steroids, sex hormones and peptides give bargaining power to suppliers. However, generic APIs do not have much of that power
  15. 15. Legal Framework The laws enumerated below are some of the most important laws that concern the Industry. •The Drugs and Cosmetics Act, 1940 and Rules, 1945: It regulates manufacturing, import, distribution and sale of pharmaceuticals (includes certain medical devices) and cosmetics. •The Drugs & Magic Remedies (Objectionable Advertisements) Act, 1954 and Rules, 1955: It Regulates advertisements of drugs relating to diagnosis / cure / mitigation / treatment / prevent of certain prescribed diseases and conditions. •The Indian Patents Act, 1970: It provides the framework for grant of process and product patents. The patent term for a product and process patent is 20 years. •The Drugs Price Control Order, 2013 (DPCO): It lays down the framework for price control of drugs identified as essential under the National List of Essential Medicines, 2011. •The Uniform Code for Pharmaceutical Marketing Practices (UCPMP): It regulates the marketing practices of the pharmaceutical industry.
  16. 16. Contd.. • The Income Tax Act, 1961: Income tax is a tax on income imposed by the Central Government. Residents in India are taxed on their worldwide income. Non-residents are taxed on the Indian source of income. The Indian tax rates applicable to non-residents could be up to 40% (excluding applicable surcharge). If the tax payable by any company, including a foreign company taxable in India, is less than 18.5% of its book profits, it will be required to pay Minimum Alternate Tax. The payments towards royalty and fees for technical services are subject to withholding taxes. • The Customs Act, 1963: It imposes import duty on all imported goods. Import of pharmaceuticals is liable to basic customs duty, additional customs duty and countervailing duty. • Central and State-specific Sales Tax / Value Added Tax (VAT) legislations: It imposes sales tax. Sales tax is a tax levied on the sale of pharmaceuticals. • The Excise Act, 1944: It imposes a duty on the manufacture of goods called Excise Duty. Excise duty is also referred to as CENVAT. It is payable on the manufacture of pharmaceuticals in India. • The Finance Act, 1994: It imposes a tax on all services unless a service qualifies as an exempt service. All contract research organizations have to pay service tax.
  17. 17. Notable trends in Indian Pharma Industry •Indian pharma companies spend 8-11 per cent of their total turnover on R&D •Expenditure on R&D is likely to increase due to the introduction of product patents; companies need to develop new drugs to boost sale Research and Development •India’s pharmaceutical export market is thriving due to strong presence in the generics spaceExport Revenue •Multinational companies are collaborating with Indian pharma firms to develop new drugs Joint Ventures •Indian Players are expanding their markets as well as production facilities abroad Expansion by Indian players abroad •Amendments to the Patents Act, 1970, to make it TRIPS compliant •The introduction of product patents in India in 2005 gave a boost to the discovery of new drugs Patents •In order to compete with global player in pharma industries, approval process of drugs has been simplified by the authorities and approval time for new facilities has been drastically reduced Less time for approval
  18. 18. Current Scenario India is now among the top five pharmaceutical emerging markets. Domestic Pharma market to grow at 10-12 per cent in FY15 as compared to 9 per cent in FY14 Generic drugs account for 20 per cent of global exports in terms of volume, making the country the largest provider of generic medicines globally
  19. 19. THANK YOU BY- Priyanka Kochar 14PGDM050 IMI-Kolkata