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Indian pharma industry
- 1. INDIAN PHARMA INDUSTRY: DRIVERS FOR GROWTH ByManish Manghnani
- 2. FLOW OF PRESENTATION • Currentscenario • Facts & figures • Growth drivers for the industry • Opportunities • Industry as the reason for growth • News
- 3. Today, Indian Pharmaindustry is emerging as a global powerhouse – becoming 3rd Pharma super power in the international level.
- 4. India is accreditedas the global pharmacy of the developing world and has attained cost-competitive manufacturing capabilities to provide quality medicines at lower cost.
- 5. Facts & Figures •Annual Turnover Rs. 226 b • Growth rate 5.2% • Share of World Pharma market 1.0% in value 8% in volume terms
- 6. • Global ranking13th in value terms 4th in volume terms • Number of Generic Brands over 60,000 in 60 therapeutic categories • OTC market Rs. 35 b growth 18-20% • Alternative medicine - Herbal / Ayurvedic market Rs. 38 b
- 7. Growth Drivers •Increasing drugR&D costs in compared to India •Enhanced healthcare investments in developing countries •Healthcare reimbursement issues in the U.S. and Europe
- 8. •Scientific breakthroughs inGenomics and Proteomics •Increasing cost and commercialization pressures in other nations •WTO patented forcements, and several other industry dynamics
- 9. • Leveraging thedomestic market opportunity • Moving up the value chain in CRAMS(Contract Research and Manufacturing Services) • Increasing foothold in Biologics Opportunities
- 10. i. Innovation drivespharmaceutical business. ii. Creating alliances. iii. Addressing global markets. iv. Generic medicines. v. Embracing change in organizations. 5 Growth Areas
- 11. •Functions pertaining to drugdiscovery •Drug development •Drug safety • Formulation •Production • Quality control • Quality assurance •Regulatory • Packaging • Logistics • Storage •Sales & marketing What in it for you? Pharmacy professional might be involved in the
- 12. •Review scientific papers, translationresearch, •Review of regulatory documents, •Clinical research. •The demand is increasing for qualified professionals in the newer segments such as: oVenture capital banking oMedical journalism o Bio-it oLaw oCorporate communications etc. What in it for you? Also involved to
- 13. • Exports Rs.141 b , 40% . • Future projections Rs. 1200 b (by McKinsey) • Number of units - 10,000 out of which approximately 300 in organized sector • Per capita drug expenditure Rs. 220 per annum Industry as the Reason for Growth
- 14. • US exportsmay drive top Indian pharmaceutical companies to grow 20 percent in 2013. • Adequate government support to further boost the domestic market. • Differential pricing strategy to strengthen market reach. NEWS
- 15. • Domestic companiesare transforming their business model to play a larger role in Global Pharmacy market. • Revenue growth optimism in pharmaceutical industry: 2013 survey reports at RnRMarketResearch.com NEWS
- 16.
Editor's Notes
- #10 http://tsmg.com/download/article/Emerging_Opportunities_Pharmabioworld.pdf Leveraging the domestic market opportunity With the growth in US and developed economies expected to taper off, emerging economies like India are expected to drive future growth. The key growth drivers in these countries are increasing per capita income, growing insurance penetration, better health awareness, higher government expenditure, adherence to IPR norms and shift in disease profiles. The Indian market was estimated at USD 8 billion in FY2008 and is expected to grow at 10-12% CAGR for the next five years. Life style related or chronic therapeutic segments are expected to grow at a much faster pace than the more traditional acute segments. Crisil forecasts the Anti Diabetic segment to have a CAGR of 19% over the period 2008-13 compared to 14% for the Anti-Infective segment. This has led to MNCs such as Pfizer, GSK, Roche and Sanofi Aventis launching almost 15 on-patent products in India with an eye on high value life style related therapeutic segments. Indian companies are well positioned to partake of this huge domestic opportunity. Indian companies need to broaden their product portfolio to include growing therapeutic segments such as anti-diabetics, central nervous system and cardiovascular. Companies can now sell premium products to aspiring Indian middle and high class, while at the same time continue their focus on low value but high volume bottom of the pyramid class Moving up the value chain in CRAMS India is today recognized as a global manufacturing hub, with nearly 40-50% lower production costs than the US and the largest number of FDA approved facilities outside the US. Several Indian companies jumped on to the CRAMS bandwagon during the first phase, which was characterized by manufacturing low value high volume intermediates, APIs and carrying out clinical trials. Strong domestic and international competition has already brought down margins in these traditional segments. The global consolidation may trigger optimization of assets both in manufacturing and research thus affecting the future business of contract service providers. CRAMS companies could be at a disadvantage during negotiation of contracts with the consolidated entity as the quantum of work offered by a single entity would potentially increase. Indian companies need to sustain their competitive advantage by consistently focusing on reducing costs and moving up the value chain. CRAMS players need to look at niche areas such as oncologyand other high-potency APIs. Antibody drug conjugates (ADCs), which are monoclonal antibodies linked to cytotoxic small molecules, is another area where contract manufacturers could look to expand. Increased outsourcing in the biopharmaceutical space also presents the contract manufacturing companies with new avenues for growth. Finished product/ Dosage form, injectables manufacturing and lypholization services are the other promising areas for contract manufacturers. Focusing on meeting end to end needs of innovator companies and venturing into new areas in the CRAMS space would allow Indian companies to differentiate from other low cost manufacturing nations and provide it the ability to give better value and charge higher margins. Increasing foothold in Biologics The biologics market was estimated to be nearly USD 70 billion in 2008. Though this appears small compared to the overall pharma market, there were 150 deals announced in 2008 alone worth nearly USD 94 billion. These deals mostly involved pharma majors like Roche (Genentech), Eli Lilly & Co. (ImClone Systems), etc. Closer home, global majors GSK and Sanofi Aventis were in detailed discussions to acquire Shantha Biotech. Four biologics made the top ten and seven biologics made it into the top twenty selling drugs of 2008. US biopharma companies alone spent over USD 65 billion in R&D last year. This has lead to a very robust product pipeline with several drugs in late stages of development. Even with the current debate on Biosimilars (generic version of biologics), the market opportunity post patent expiry for most biologics in 2017 is expected to be immense. Indian companies cannot afford to miss the bus on biologics. This market is still in nascent stage and offers a first mover advantage to companies which can get their strategy right. However unlike the traditional pharma segment, entry barriers are very high in this space due to the investment involved. Biologics based companies in the west, which have previously received funding from venture capitalists may now find it difficult to raise cash under the current economic scenario. This presents a good opportunity for Indian pharma companies with significant cash on their balance sheet to scout for suitable targets to gain market and technology access.
- #11 http://www.bioexpand.fr/files/4_10032012The_five_pharma_industry_growth_driversV2.pdf