The document analyzes the pharmaceutical sector in India. It discusses that India is a leading producer and exporter of pharmaceuticals, with the industry experiencing rapid growth. The annual turnover of the Indian pharmaceutical market increased from $16.41 billion in 2016 to $20.03 billion in 2019. The document outlines the evolution and growth of the sector over time, driven by government initiatives and increasing R&D spending. It provides an overview of major players like Sun Pharma and Cipla, including their history, operations, products and financial details. A SWOT analysis is also presented for the two companies.

1. Analysis of Pharmaceutical
sector in India
By
Under the guidance of
Prof. Aatmaram Sakhardandy
Preshit kale
Akshay Krishnapoorkar
1

2. Introduction
 Leading pharma producer
 One of the highest exports
 Among fastest growing industries
 Rapidly growing healthcare sector
 Robust growth in Biotech industry
2
16.41
17.87 18.12
20.03
0
5
10
15
20
25
2016 2017 2018 2019
Annual turnover of Indian
pharmaceutical market
(In US$ billion)
6.8
13.2
9.5 11.5
5.1
14.5
8.8 7.7
12.1
8.9
-11.2
-8.9
2.4
-15
-10
-5
0
5
10
15
20
Jun
'19
Jul
'19
Aug
'19
Sep
'19
Oct
'19
Nov
'19
Dec
'19
Jan
'20
Feb
'20
Mar
'20
Apr
'20
May
'20
Jun
'20
Indian pharma market's growth Total Growth Y-o-Y (%)

3. Evolution timeline3
•Indian Patent Act passed in 1970
•Development of production infrastructure
•Export initiatives taken
1970-90
•Liberalized market
•Indian companies increasing launch operations in foreign countries
•India a major destination for generic drug manufacturing
•Approval of Patents (Amendment) Act 2005, which led to adoption of product patents in India
1990-2010
•Increased patent filings by pharma players
•Likely adoption of newer sales models such as channel management, KAM and CSO
•The National Pharmaceutical Pricing Policy, 2012 (NPPP-2012)
2010-2012
•2013: New Drug Pricing Control Order issued (prices of drugs by 80%)
•2014: 100% FDI allowed in medical device industry
•Leading Indian pharma companies are raising funds aggressively
•2015: India has 10,500 manufacturing units and over 3,000 pharma companies
2012-2015
•In 2016, FDI increased to 74% in existing pharmaceutical companies and 100 per cent for new
projects
•Pharma Vision 2020
•Approval time for new facilities has been reduced to boost investments
2016 onwards

4.  Pharma Vision 2020
 Pharmaceutical Parks
 Union Budget 2020-21
 Support for technology upgrades
 Relaxation in FDI norms
Government Initiatives4
23.58
35.07 34.91
41.42
45.96
0
5
10
15
20
25
30
35
40
45
50
FY '16 FY '17 FY'18 FY'19 FY'20
Government expenditure on
health in India (US$ billion)

5. R&D spending in Indian pharma5
7.9
8.7
8.5
8.6
8.4
7.4
7.6
7.8
8
8.2
8.4
8.6
8.8
FY16 FY17 FY18 FY19 FY20
R&D Investment by
Indian Pharma
Companies
(% of sales)
57
146
160
225
268
0 50 100 150 200 250 300
Torrent
Pharma
Cadila
Healthcare
Cipla
Lupin
Sun
Pharma
R&D Spending by Top Indian
Pharma Companies in FY20 (US$
million)

6. Pharmaceutical Exports6
16.9 16.8
17.3
19.1
16.3
14.5
15
15.5
16
16.5
17
17.5
18
18.5
19
19.5
FY'16 FY'17 FY'18 FY'19 FY'20
Pharmaceutical exports
from India
(US$ billion)
North
America,
32.10%
Africa,
18.00%
EU,
15.70%
ASEAN,
6.90%
LAC,
6.80%
Middle
East,
5.60%
Others,
14.90%
Major export destination
for Indian pharma in
FY20 (%)

7. Top pharma companies7

8. Sun Pharma8
1983
• Established with a portfolio of five psychiatry products
1994
• Launched initial public offer (IPO)
1996
• Sales network expanded across 24 countries
1997
• First international acquisition with Caraco Pharmaceutical Laboratories, USA
2013
• Became world’s fifth largest specialty generic pharmaceutical company with acquisition
of Ranbaxy
2017
• Agreement signed with National Institute of Virology, India to fight Zika, Chikungunya
and Dengue
2018
• Sun Pharma to acquire Pola Pharma in Japan
• Sales of Rs 27,956 crore (US$ 4 billion) in FY18
2019
• License agreement with AstraZeneca for novel oncology products in China
• Licensing agreement with China Medical System Holdings for generic products

9. Sun Pharma
 World’s fifth largest specialty generic pharmaceutical company
 Serves over 150 markets across the world
 More than 2,000 marketed products
 More than 40 manufacturing sites
 In FY20, company’s total income reached Rs 33,473.48 crore (US$ 4.75
billion)
9

10. Cipla10
1935
• Incorporated in Mumbai, Maharashtra as Chemical Industrial & Pharmaceutical Laboratories
Ltd
1952
• Set up of first research division
1985
• Approval from FDA for bulk drug manufacturing plants
1999
• Strategic partnership with Ranbaxy
2013
• Acquired 100% stake in Medpro South Africa
2017
• Received approval for Q-TIB from World Health Organization (WHO)
2019
• Acquired a novel & patented anti-infective product, Elores, from Venus Remedies Ltd.
• received approval for generic version of Gilead Sciences, Inc’s Letairis
2020
• Acquired four key brands from Wanbury for up to Rs 89 crore (US$ 12.73 million) in order to
strengthen its women’s health segment

11. Cipla
 Leading global pharmaceutical company
 More than 1,500 products various therapeutic categories
 Over 43 state-of-the-art manufacturing facilities for API and
formulations
 Ranked amongst the top 10 most dispensed generic companies in North
America
11

12. SWOT analysis12
Sun Pharma
Strengths:
• Very limited competition for Pantoprazole & Eloxatin in
US market
• strong marketing & sales force of over 36,000 employees
• Strong brand presence in India and US markets.
Weaknesses :
• Limited market share growth
• Limited presence in European countries
Opportunities:
• Leverage their acquisitions to further increase their
growth
• Increase presence in contract manufacturing
• Increase of healthcare awareness in India
Threats:
• Growing competition in generic market
• High price sensitivity of the consumer
Cipla
Strengths:
• Large basket of 1500 formulations and partnered with 8
leading generics companies in US for 125 projects
• Best in the country R&D
• 18 brands feature among top 300 brands
Weaknesses:
• Not present in CRAMS and Biopharmaceutical segments
• IPR regime
• Lack of significant presence in developed countries
Opportunities:
• Focusing on Bio therapeutics
• venturing towards cardiology and anti- cancer
Threats:
• Drug Pricing control methods in India
• Intense competition in generics industry

13. Company Stats13
Sun Pharma
(FY20)
Cipla
(FY20)
Headquarter Mumbai Mumbai
National ranking 1st 4th
Manufacturing sites 43 46
No. of Products 2000+ 1500+
No. of Employees 36000+ 25000+
Total income (in millions Rs.) 334,735 174,762
Net profit (in millions Rs.) 37,649 15,465
R&D expenditure (in millions Rs.) 19,736 11,750
R&D expenditure (% of sales) 6.1 6.9
Sales (in Millions Rs.) 328,375 166,948
sales promotion expense (in Millions Rs.) 5,557.7 7,739.2
CSR spending (in millions Rs) 43.71 418.1
Net worth (in millions Rs) 453,000 157,630

14. Distribution channel14
Type Margins
Carrying and Forwarding Agent 4-8%
Stockist 6-10%
Distributor 8-12%
retailer/Pharmacy 16-22%

15. 15 Company products
Sun Pharma
Formulation
Active Pharmaceutical
Ingredients (APIs)
Over-the-counter
(OTC) product
Cipla
Formulation
Active Pharmaceutical
Ingredients (APIs)
Over-the-counter
(OTC) products
Tablets Capsules Injectable Ointments
Creams Liquids Nasal sprays Hormones

16. OTC- Pain relief gels and sprays
Sun Pharma Cipla
16 Company products
Diclofenac Diethylamine – 1% w/w
Methyl Salicylate – 10% w/w
Menthol - 5% w/w
Linseed oil – 3% w/w
OTC- Anti fungal dusting powder
Clotrimazole – 1% w/w

17. 17 Segment wise revenue
0
5
10
15
20
25
Segment wise revenue comparison in India (in
billion Rs.)
Sun Pharma Cipla

18. 18