The document analyzes the Indian pharmaceutical industry's landscape, including its market overview, growth drivers, and competitive dynamics. It highlights key players, strengths, weaknesses, opportunities, and threats, as well as the impact of government regulations like the National Pharmaceutical Pricing Policy. Additionally, it forecasts significant growth for the sector, projecting it to become the third-largest pharmaceuticals market by 2020.

1. Presented By:
Arjit Parashar Arun Singh Amar Shakti
Kumar
Industrial Analysis Project

2. Analysis on
Indian Pharmaceutical
Industry
(Grade Orange)

3. Contents
 Industry Overview
 SWOT Analysis
 PEST Analysis
 Growth Drivers
 Time Line Analysis
Arjit Parashar
Amar Shakti kumar
Arun Singh

4. PHARMA
Active
Pharmaceutical
Ingredients / Bulk
Drugs
Branded
Generic
Formulations
Chronic
Acute

6. Indian pharmaceutical market
segments by value
16%
13%
13%
8%9%
7%
7%
27%
Sales
Anti-Infectives 16%
CardioVerscular(CVS) 13%
Gatro Intential 13%
Vitamins, Minerals 8%
Repiratory 9%
Pain 7%
Anti Diabetic 7%
Others 27%

7. Market Share of 2015
23%
77%
Multinational
Corporations
23%
Indian
Companies
77%
Key International Players
• Abbott Laboratories
• GlaxoSmithKline
• Pfizer
Key Domestic Players
• Sun Pharma
• Cipla
• Lupin Limited
• Ranbaxy
• Dr.Reddy‟s

8. State-wise number of Pharma mfg
units in India

9. Concentration of Pharma mfg units
in India (%)
30%
15%
7.5%7.5%
5.5%
34.5% Maharashtra 30%
Gujarat 15%
West Begal 7.5%
Andhra Pradesh 7.5%
Tamilnadu 5.5%
Others 34.5%

10. Beginning
 India saw its first pharmaceutical company in 1930,
Bengal Chemicals and Pharmaceuticals works
 Till 1970s Indian pharmaceutical market was non
existent

11. In Last 2 decades
 5 Central Public Sector Units
 20,000 registered units
 250 large units
 about 8000 Small Scale Units

12. India’s Pharma sector at a glance
$18.4 billion
Domestic Pharma
Market in FY14
$55.9 billion (23.9% +)
Estimated Pharma
Market Size in 2020
$16.6 billion
Pharma Exports in FY15
74% Share of Indian Companies
in the Pharma Market in 2015
60% Share of Urban Regions
in the Domestic Pharma
Market in 2013
5%Pharma FDI as a Share
of Total FDI in India in FY14

13. 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

15. 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

16. Cont…
 Well established R&D facilities.
 Low cost of labor, innovation, manufacturing and
operations.
 Property rights supported by well-developed judicial
system.

17. 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.

18. Cont…
 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

19. 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

20. Cont…
 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

21. Cont…
 Exports have grown very significantly at around 19%
CAGR

22. Cont…
 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

23. 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)

24. Cont…
 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.

25. Cont…
 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

27. Political Factors
 Political factors include government regulations
and legal issues and define both formal and
informal rules under which the firm must operate.
Some examples include:
 Tax policy
 Employment laws
 Environmental regulations
 Trade restrictions and tariffs
 Political stability

28. National Pharmaceutical Pricing Policy (NPPP)
2012
 The Indian government introduced NPPP in 2012 to regulate the
prices of 348 essential drugs, based on their strengths and dosages.
 Manufacturers are allowed to sell these drugs on or below the price
fixed by the government.
 The policy is applicable to imported drugs as well.
IMPLICATION
 Implementation of NPPP resulted in decline of profit margins for
products under regulation from 20% to 16% and 10% to 8% for
retailers and stockiest respectively during 2012–13.
 The policy has resulted in significant uncertainty among stockists
on whether to continue with the business amid low profit sand
margin reduction

29. Medical Council of India (MCI) Guidelines
on sales and marketing practices
 MCI guidelines were issued to ensure transparency in
sales and prevent unethical practices of some doctors.
 MCI aimed to stop medical professionals from
prescribing drugs in exchange of bribe from drug
manufacturers.
IMPLICATION
 Tax authorities use the Central Board of Direct Taxes
(CBDT) circular based on MCI guidelines to decide on
permissible sales and marketing expenses.

30. Compulsory licensing
 India has adopted compulsory licensing on the following
grounds under Section 84 of the Indian Patent Act:
 The drug did not meet reasonable requirements of the citizens,
 The drug was not reasonably priced
 The patent was not locally manufactured.
IMPLICATION
 The imposition of this regulation paved way for production of
low-cost generic medicines of the branded patent
drugs.Thus,costly,branded life saving drugs are available at a
cheaper rates to the Indian population.
 The regulation affects the brand value of branded drugs
manufactured by MNCs, and thus has been opposed by them

31. Economic Factors
 Economic factors affect the purchasing power of
potential customers and the firm's cost of capital.
The following are examples of factors in the macro
economy:
 Labour Cost
 Skilled Workers
 Infrastructure quality
 Inflation rate

32. Social Factors
 Social factors include the demographic and
cultural aspects of the external macro
environment. These factors affect customer needs
and the size of potential markets. Some social
factors include:
 Health consciousness
 Population growth rate
 Age distribution
 Career attitudes
 Emphasis on safety

33. Company Net Sales
(2013)Million USD
Employees
Cipla 1.39 20,000
Dr Reddy’s
Laboratories
1.14 16,300
Ranbaxy Labs 1.07 14,600
Aurobindo Pharma 0.92 8,635
Lupin Ltd 0.91 11,355
Sun Pharma 0.68 11,200
Novartis India 0.14 4,500 (115,000
Worldwide)
Key Players Locally

34. Technological Factors
 Technological factors can lower barriers to entry,
reduce minimum efficient production levels, and
influence outsourcing decisions. Some
technological factors include:
 R&D activity
 Automation
 Technology incentives
 Rate of technological change

35. GROWTH DRIVERS
Increase in Domestic demands
Rise in outsourcing activities
Growth in Financing products (Health
Insurance)
Increase in disposable income of the
customers
Complications in diseases

36. Events & timeline analysis

37. Company Profile
Comp. Founde
d in
Headquarte
rs
Share
Price(NSE)
(16-09-15)
Employe
e
products
Sun P. 1983 Mumbai 886.80
(+20.20)
32,700 Pharmaceuticals, generic
drugs
Cipla 1935 Mumbai 658.05
(-0.85)
22,036 Pharmaceuticals and
diagnostics
Z. cadila 1952 Ahmedabad 1894.00
(+99.55)
11000 Generic drugs
gsk 2000 Brentford,
London,
United
Kingdom
1296.24
(+6.24)
96,575 Medicines and vaccins
Mankind 1995 Okhla Delhi,
India
Does not
Issue
10000+ Pharmaceuticals, Generic
drugs, OTC, FMCG,
Diagnostics

38. Events & timeline analysis
Rs. In million
Comp. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Sun P. 11852.8 16368.2 16,652.7 23,656.4 27,697.5 18,461.3 31,075.7 40,155.6 24321.4 28287.9
Cipla 2254.52 2981.35 3561.99 4203.29 5234.29 5605.69 6331.09 6977.50 8202.42 9380.29
Z. cadila 1090.00 1276.60 1450.30 1681.80 1743.40 1885.60 2920.30 3150.80 5675.70 4042.10
gsk 1474.07 1541.93 1578.58 1676.36 1884.14 2125.20 2375.88 2630.30 2546.15 3287.57
Mankin
d
190 335 486 618 812 1043 1588 1909 2383 3000

39. Increase and decrease in revenue
In %
Comp. 2006 2007 2008 2009 2010 2011 2012 2013 2014
Sun P.
28 2 30 15 -33 41 23 -39 14
Cipla
24 16 15 20 7 11 9 15 13
Z. cadila
15 12 14 4 8 35 7 44 -28
gsk
4 2 6 11 11 11 10 -3 23
Mankin
d 43 31 21 24 22 34 17 20 21

40. 0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
35,000.00
40,000.00
45,000.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Rs.Inmillion
year
Sun P. Cipla Z. cadila gsk Mankind

41. 1983 • Company set in Vapi, Gujarat
1988
• First few cardiology products launched
1989
• Gastrology products introduced, exports to neighboring
countries began
1994
• IPO in October, listed in major stock exchanges in India,
offering oversubscribed 55 times
1996
• 1st acquisition - an API manufacturing unit from knoll
pharma
Events & timeline of sun pharma

42. 1997
• International acquisition- Caraco pharma Labs, Mj
pharma
2004
• Acquired phlox pharma- Cephalosporin actives
manufacturer
2010
• Acquired Taro pharma, size of US business doubled
2014
• Acquired Ranbaxy labs for $3.2 m, sun becomes largest
company in India, 5th largest globally
Cont.

43. Events & timeline of Cipla
1935
• Company set in Mumbai as a Pharmaceutical
Laboratories
1984
• The name of the company was changed to Cipla ltd.
1985
• US FDA approved the company's bulk drug
manufacturing facilities
1994
• Cipla launched Deferiprone, the world's first oral iron
chelator.
2001
• Cipla offered medicines for HIV treatment at a fractional
cost ( less then $350 per year per patient)
2012
• The company slashed prices of three life-saving cancer
drugs by 50 to64%

44. Events & timeline of Mankind
1995
• Inception of mankind pharma
2000
• Company established its operation all over India
• Launched new division discovery for the segment-
diabetic, metabolic disorder, antibiotics, gastro intestinal,
anti-fungal.
2005
• Launched le fester pharma segment- antibacterial.
• Won the Indian express pharma pulse award for "overall
best performance".
2006
• Established inject able state of the art unit at paonta
sahib

45. Cont.
2007
• Launched future mankind, special mankind, vet
mankind
• Chrys capital became an investor partner
2007
cont.
• Teamed up with Roche diagnostic for the marketing of
product ‘Accuchek go'
2008
• Certified as the most potential& "A" grade vendor in
supply chain management by HINDALCO
2010
• Launched OTC products like prega news, unwanted-72,
don't worry
• Spread the wings globally with the launched of mankind
in Srilanka

46. Cont.
2010
• Established state of art manufacturing unit for liquid
dosages & tablets
2011
• Incorporation of the R&D centre- mankind research
centre in NCR
• Successfully acquired longifene- the former brand of
UCB Belgium
2011
cont.
• Launched a new division "pet Mankind" for the basic
care, health care, hygiene and nutritional need of pet's
2012
• They plan to add another 1000 people to their
workplace within two years .

47. Events & timeline of Z. Cadila healthcare
1952
• Cadila laboratories was founded
2000
• Issue IPO in BSE
2001
• Company required another Indian Pharmaceutical
company called German Remedies

48. Cont.
2007
• Comapny signed an agreement to acquire 100 %
stake in Brazil's Quimica e Farmaceutica Nikkho do
Brasil Ltda ( Nikkho) for around 26 million dollars.
2010
• Received a prestigious Welcome trust award under
the new R&D for affordable healthcare in India
2014
• Launched the world's first adalimumab biosimilar
under the brand name Exemptia (immune disorders)

49. Events & timeline of GSK
1924
• It was established in India under the name of H.J. Foster &
Co. ltd.
2000
• Glaxo wellcome and smithkline beecham announced
their intention to merge and become glaxosmithkline
2002
• The company global headquarters are at GSK house
Brenftord, london officially opened by prime minister
Tony Blair
2005
• Chris Gent , former CEO of Vodaphone, has been the
chair since 2005
2008
• Andrew Witty took over as CEO

50. Cont.
2012
• GSK pleaded guilty to criminal charges in the united
state and agreed to pay a $3 billion settlement ( the
charges related to GSK’s promotion of drugs for
unapproved uses) medicine was anti- depressants
2013
• The company announced that it would no longer
pay physicians to promote its drugs
2015
• Philip Hampton, chair of Royal Bank of Scotland, will
replace Gent in September 2015

51. Current News
Sun Pharma (16 September 2015)
 Agreement with US Eye Care firm for around 40 million
US $.
Cipla (17 July 2015)
 Announced to by Invagen Pharma inc. & Exelan Pharma
inc. about 550 Million USD in US

52. Cont…
Zydus Cadila (24 June 2015)
 Received final approval from US food and drug
administrations (USFDA) to sale Pyridostigmine
Bormide(PGB) Tablets.
GlaxoSmithKline (8 June 2015)
 CCI has imposed fine of Rs. 64 Crores for being indulge in
anti competitive activity. It had tried to fix entire bidding
for supply of maligning vaccines for HAZ Pilgrims.

53. Cont…
Mankind’s DHA Campaign (10 September 2015)
 MKD has arose the importance of DHA
among children.
 They reached 12000 Pediatricians and 20000
children to eliminate the DHA deficiency
from the Indian society in last 8 months.

54. FUTURE TREND
 3rd largest pharmaceuticals market by 2020.
 20% of global exports in generics.
 USD 45 Billion in revenue by 2020.
 USD 26.1 Billion in generics by 2016.
 USD 200 Billion to be spent on infrastructure by 2024.
 49% of all drug master filings registered in the USA.

55. How?
55

56. THANK YOU!