The Indian pharmaceutical sector is estimated to reach $100 billion by 2025, accounting for 10% of the global pharmaceutical industry by volume. It currently accounts for 20% of global generic exports. The sector is expected to grow at a CAGR of 12.89% until 2020 to reach $55 billion. By 2020, India will be among the top 3 pharmaceutical markets by growth and 6th largest globally. The government has implemented policies and initiatives like 'PharmaVision 2020' to make India a global pharmaceutical leader and improve affordability and availability of medicines.

1. INDIAN PHARMA SECTOR OVERVIEW - 2018
MR NITESH BHELE

2. INDIAN PHARMA SECTOR OVERVIEW - 2018
Indian pharmaceutical sector is estimated to account for
approx. 3.6 per cent of the global pharmaceutical
industry in value terms and 10 per cent in volume terms.
It is expected to grow to US$100 billion by 2025.
India accounts for 20 per cent of global exports in
generics. India’s pharmaceutical exports stood at US$
16.84 billion in 2016-17 and are expected to reach US$
20 billion by 2020.
The country’s pharmaceutical industry is expected to
expand at a CAGR of 12.89 per cent over 2015–20 to
reach US$ 55 billion. India is the second largest
contributor of global biotech and pharmaceutical
workforce.
Indian healthcare sector, one of the fastest growing
sectors, is expected to cross US$ 372 billion by 2022.
The generics market stood at US$ 26.1 billion in 2016.
India’s generics market has immense potential for growth
By 2024-25, India’s biotech industry is estimated to
increase to US$ 100 billion from US$ 11 billion in FY
2015-16
By 2020, India is likely to be among the top three
pharmaceutical markets by incremental growth and 6th
largest market globally in absolute size.
Source: India Biz, PWC, Department of Industrial Policy and Promotion, Deloitte, PharmaBiz, Frost
and Sullivan Report on Indian Pharmaceutical Market, McKinsey, Make in India, DGCI&S

3. The Indian pharmaceuticals market
witnessed growth at a CAGR of 5.64 per
cent, during FY11-16, with the market
increasing from US$ 20.95 billion in
FY11 to US$ 27.57 billion in FY16. The
industry’s revenues are estimated to have
grown by 7.4 per cent in FY17.
Medicine sales in India increased 8.1 per
cent year-on-year in November 2017.
Source: Department of Pharmaceuticals, PwC, McKinsey, Arance Research, AIOCD AWACS
INDIAN PHARMA MARKET – REVENUE & GROWTH

4. The share of generic drugs is expected
to continue increasing; domestic generic
drug market is expected to reach US$
27.9 billion in 2020
Generic drug market is expected to
grow in the next few years, with many
drugs going off-patent in the US and
other countries
INDIAN PHARMA MARKET – PATENTED DRUGS Vs GENERIC DRUGS
Source: Business Monitor International, FCCI Indian Pharma Summit 2014-15

5. Source: Department of Commerce India, Department of Pharmaceuticals, India Business News, BMI
In FY17, India exported pharmaceutical products worth
US$ 16.8 billion, with the number expected to reach
US$ 40 billion by 2020. During April – September 2017,
India exported pharmaceutical products worth Rs 411.3
billion (US$ 6.4 billion). During April – October 2017,
India exported pharmaceutical products worth Rs. 478.3
billion (US$ 7.4 billion)
Around 40.6 per cent of India’s US$ 16.8 billion
pharmaceutical exports in 2016-17 were to the
American continent, followed by a 19.7 per cent to
Europe, 19.1 per cent to Africa and 18.8 per cent to
Asian countries.
INDIAN PHARMA MARKET – CLASSIFICATION BY THERAPY

6. In FY17, highest expenditure on research and
development has been done by Sun Pharma,
followed by Lupin. Sun Pharma’s R&D
spending is 7.6 per cent of the total sales in
the FY17 , which grew at a CAGR of 38.3 per
cent from FY11 to FY17. Lupin’s R&D
spending was 13.5 per cent of sales in FY17,
with major thrust on oral solids (45 per cent
of R&D spend)
INDIAN PHARMA MARKET – R&D
Source : R&D - Research and Development 1 – Data is up to Dec 2015, 2 – Data is up to September
2015, 3 - Data is for FY15

7. Pharma, healthcare and biotech have witnessed significant increases in M&A activities over the
years. Investments in Indian pharmaceutical sector increased 38 per cent in the first half of 2017.
Over the last three years, pharmaceuticals segment has accounted for more than 70 per cent of
M&A deals
INDIAN PHARMA MARKET – M & A

8. Indian Drugs & Pharmaceuticals sector has received cumulative FDI worth US$ 15.57 billion between April 2000
– September 2017. Companies in Indian drug and pharmaceuticals industry are expected to invest Rs 82 billion
(US$ 1.27 billion) between FY16-18.
INDIAN PHARMA MARKET – M & A

9. The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical
sector in order to allow FDI up to 100 per cent under the automatic route for manufacturing of medical devices subject to certain
conditions.
The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 14.71 billion between April 2000 and March
2017, according to data released by the Department of Industrial Policy and Promotion (DIPP).
Indian pharmaceutical firm, Eric Lifesciences Pvt Ltd, has launched its initial public offering (IPO) worth Rs 2,000 crore (US$ 311
million) in June 2017.
Indian pharmaceutical company, Cadila Healthcare Ltd, is planning to raise Rs 1,000 crore (US$ 155 million) via a qualified
institutional placement (QIP) of shares shortly.
Capital International Group, a private equity fund, has acquired a three per cent stake in Intas Pharmaceuticals Ltd from
ChrysCapital Llc for a consideration of US$ 107 million, thereby valuing Intas Pharma at approximatively US$ 3.5 billion.
MAJOR INVESTMENTS IN INDIAN PHARMACEUTICAL SECTOR

10. Aurobindo Pharma Ltd, has acquired four biosimilar products from Swiss firmTL Biopharmaceutical AG, which will requireTL
Biopharmaceutical to supply all the developmental data for four molecules, which will be developed, commercialised and marketed
by Aurobindo Pharma
Piramal Enterprises Ltd acquired a portfolio of spasticity and pain management drugs from UK-based specialty biopharmaceutical
company Mallinckrodt Pharmaceuticals, in an all-cash deal for Rs1,160 crore (US$ 171 million).
Aurobindo Pharma has bought Portugal based Generis Farmaceutica SA, a generic drug company, for EUR 135 million (US$ 144
million).
Sun Pharmaceutical Industries Ltd, India’s largest drug maker, has entered into an agreement with Switzerland-based Novartis AG, to
acquire the latter’s branded cancer drug Odomzo for around US$ 175 million.
Kedaara Capital Advisors LLP, a private equity (PE) firm, plans to invest Rs 430 crore (US$ 64.5 million) to acquire a minority stake
in Hyderabad-based diagnostics chainVijaya Diagnostic Centre Pvt Ltd.
Sun Pharmaceuticals Industries Limited plans to acquire 85.1 per cent stake in Russian company Biosintez for US$ 24 million for
increasing its presence in Russia through local manufacturing capability.
Abbott Laboratories, a global drug maker based in US, plans to set up an innovation and development center (I&D) in Mumbai,
which will help in developing new drug formulations, new indications, dosing, packaging and other differentiated offerings for Abott’s
global branded generics business.
MAJOR INVESTMENTS IN INDIAN PHARMACEUTICAL SECTOR

11. INDIAN GOVERNMENT IN INDIAN PHARMA SECTOR
The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction
of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies.
In addition, the thrust on rural health programme, lifesaving drugs and preventive vaccines also augurs well for the
pharmaceutical companies.
The implementation of the Goods and ServicesTax (GST) is expected to be a game-changer for the Indian
Pharmaceuticals industry. It will lead to tax-neutral inter-state transactions between two dealers, thereby reducing the
dependency on multiple states and increasing the focus on regional hubs. It is expected to result in an efficient supply
chain management, which is expected to reduce its cost considerably.The cost of technology and investment is expected
to reduce on account of tax credit which can be availed now on the duties levied on import of costly machinery and
equipment.
The Government of India unveiled ‘PharmaVision 2020’ aimed at making India a global leader in end-to-end drug
manufacture.Approval time for new facilities has been reduced to boost investments.The government introduced
mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the
issue of affordability and availability of medicines.

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MR. NITESH BHELE
PHARMACEUTICAL & HEALTHCARE
MARKETER
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