Indian Pharma market is predominantly a branded generic market. How does this auger for the industry per se, how is it then placed to grow going in the future. This brief presentation attempts to throw some light on the said topic

1. INDIAN PHARMA
OUTLOOK

2. INDIAN PHARMA MARKET:
BRANDED GENERICS
CHARACTERISTICS

3. Indian Pharma Market (IPM): Predominantly a Branded Generic
market
High degree of fragmentation; Low Price; Competition impacting prices
Significant pricing disparity exists across molecule segments
-Please note MRP is approximate calculated on PTS *Source: Taking wings, Ernst & Young, 2009.; ‘ Source: IMS Dataset Jul’11; #KPMG, The Indian
Pharmaceutical Industry Collaboration for Growth1. Industry and company sources
High Degree of
Fragmentation
Competition Impacting Prices
Predominantly a Branded Generic
Market1
No. of players in India# : ~20,000 ; No.
of Brands in India* : over 60, 000

4. IPM: Driven by Growing Indian Economy
Increasing GDP and rising healthcare expenditure
Healthcare spend by
Government is on an
upward trajectory#
The Indian population’s expenditure on
healthcare is steadily moving up
The Indian economy is growing fast.
*PwC report: Indian Pharma Inc: Capitalising on India’s growth potential page, 8 & 9 #Ministry of Health & Family Welfare website; India Pharma 2020 : Propelling access and acceptance
and realising true potential; Mc Kinsey & Company Report-2010
Indian Population’s expenditure breakup
as a % of overall disposable income

5. IPM: Changing Competition Mix
Market dominated by Indian Players- Recent shift in favour of MNCs driven by M&As
A good no. of M&As and JVs in the recent past
*ORG IMS, please note all figures are MAT Dec except 2011 which is on MAT August basis
3/4th of the market by Local companies. Recent shift in
favor of MNCs driven by M&As
Rapid changes in the top 10 players

6. IPM: Sources of Growth
Both Volume and New Products; Chronic therapies growing faster
Chronic TAs viz CVD, Neuro psychiatry
registering higher growth #
New Products and Volumes
are the key drivers of
growth’
Institutions also contributing
*PwC report: Indian Pharma Inc: Capitalising on India’s growth potential page, 26, # Source : IMS Data-set & Team Analysis, `Note: All figures are MAT Dec, except 2011, where fig mentioned are on MAT July basis, IMS dataset

7. IPM: Sources of Growth
Metros, TC-1 and Rural markets driving growth; Doctor base expanding, so also, Field Force
Contribution of Metro and Class-1 towns has moved from
59.1% to 62.3%
Doctor segment expanding and so is the
Field force of pharma companies
*India Pharma 2020 : Propelling access and acceptance and realising true potential; Mc Kinsey & Company Report-2010, #Source : IMS Data-set & Team Analysis
Value Share Value Share
CAGR
10/05
All India 5,169 100.0% 10,397 100.0% 15%
Metros 1,703 32.9% 3,334 32.1% 14%
Class1 1,355 26.2% 3,141 30.2% 18%
Class2 1,106 21.4% 1,850 17.8% 11%
Rural 1,003 19.4% 2,072 19.9% 16%
2005 2010

8. INDIAN PHARMA MARKET:
BRANDED GENERICS
GOING FORWARD

9. Affordability expected to Increase
Driven by higher income levels & health insurance penetration
•Rising Income levels will drive more households in Upper & Middle Income level 1
•Health insurance penetration will increase to ~45% of population 2
1. The ‘Bird of Gold’: The Rise of India’s Consumer Market, May 2007, McKinsey Global Institute
2. India Pharma 2020 : Propelling access and acceptance and realising true potential; Mc Kinsey & Company Report-2010
The Income levels are set to rise Health Insurance Penetration is estimated to grow

10. Govt. focus will be on Primary & Secondary care in Tier-
2/ Rural towns; while Private sector will focus on Tertiary
care in Metros & Secondary care in Teir-1 cities
Accessibility & Acceptability expected to Improve
Through primary & Secondary care focus
Companies will invest in shaping Patient Tunnel
Healthcare in Metro and TC- 1 will
continue to drive IPM*
Ministry of Health & Family Welfare website; India Pharma 2020 : Propelling access and acceptance and realising true potential; Mc Kinsey & Company Report-2010,*IMS Data-set & Team Analysis

11. 1. India Pharma 2020 : Propelling access and acceptance and realising true potential; Mc Kinsey & Company Report-2010
2. Report of the Committee on India Vision 2020, Planning Commission Government of India, 2002
Epidemiological factors expected to expand Patient Pool
Rising population and disease prevalence will expand patient pool
Several disease areas likely to see 25-45% rise in
patient pool 1
Patients suffering from key diseases
Mn
Increase in the Productive Population Pool, would
drive higher treatment rates 2
Nos % Nos % Nos %
Total 1,175 100 1,256 100 1,331 100 1.3%
<15years 370 31 372 30 373 28 0.1%
15-64years 747 64 819 65 882 66 1.7%
>65years 58 5 65 5 76 6 2.7%
CAGR
(2020/10)
2010 2015 2020
Year
Population spread by Age
Mn

12. INDIAN PHARMA MARKET:
VACCINES , INNOVATIVE PRODUCTS & OTC

13. •62% of the revenues in 2009-2010 from the biotech industry came from bio-
pharmaceuticals.#
•25% of all Bio-pharmaceutical sales - contributed by Vaccines*
Vaccine Market : Current
Biotech Industry is steadily growing
#Source: ABLE-Biospectrum industry survey, June 2010, Ernst & Young analysis, *Source: PwC report: Indian Pharma Inc: Capitalising on India’s growth
potential page, 35

14. Source: PwC report: Indian Pharma Inc: Capitalising on India’s growth potential page, 36 & 37
Vaccine Market : Going Forward
Increasing disposable income will drive growth
•Increasing disposable incomes will drive growth of the vaccine segment further.
Trend will be towards combination vaccines
•Govt. interventions through national immunization drives will increase awareness.

15. Innovative products : Current
Patent protected products being launched; Contribute less than expected, only about
1-2% of the IPM *
#Indicative List
•A no. of patented products launched during 2008-10 due to the advent of the product patent regime in
2005
•In-Licensing, Joint Ventures, Marketing agreements driving the focus towards niche products
#Source : Ernst and Young analysis, Taking Wings, 2009 * Mckinsey & Company India Pharma 2020 Propelling access & acceptance realising true potential Source: PwC report: Indian Pharma Inc: Capitalising on India’s
growth potential
Launch of Patented Products In-Licensing, JVs & Marketing agreements

16. Innovative Products : Going Forward
Patent protected products launch expected to increase: Projected to be less than 5% of
IPM by 2020
•Patented product segment is projected to grow to USD 1.7 billion by 2020 (base case) . *
•Simultaneous CTs across the globe are diminishing time to launch the product.
•In the future, with growing affordability, deepening of health insurance and steady
improvement in Intellectual Property Rights (IPR),patented product launches should
increase.*
•Mckinsey report ‘India Pharma 2020, projected the market for patent protected products
to be less than 5% of the IPM by 2020.
#Source : Ernst and Young analysis, Taking Wings, 2009 * Mckinsey & Company India Pharma 2020 Propelling access & acceptance realising true potential *PwC report: Indian Pharma Inc: Capitalising on India’s growth
potential page, 26

17. Source : India Pharma 2020 : Propelling access and acceptance and realizing true potential; Mc Kinsey & Company Report-2010
Projected Growth Rates
%
• McKinsey’s projections are broader & directional in nature
IPM: Going Forward
Increasing affordability, accessibility, acceptability and epidemiological factors expected
to drive IPM growth of 14.5% CAGR

18. THANK YOU