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The market

  • The double-digit growth of the Indian pharmaceutical market outpaces the growth of the global industry(as per IMS Data).
  • India is regarded as a high-quality and low-cost producer of pharmaceuticals.
  • The introduction of the product patent regime has enabled rapid integration of the Indian industry into the global pharma industry.
  • Cumulative FDI inflow for Drugs and Pharma for the period from April 2000 to February 2010 is USD 1.7 billion(as per Fact Sheet on Foreign Direct Investment, February 2010).
  • Highly fragmented industry with about 300 – 400 units in the organized sector and around 15,000 units in the unorganized sector.
  • Generics remain the mainstay of the Indian pharmaceutical industry.

Opportunities:
Domestic market

  • Domestic market to witness significant growth on the back of sustainable growth drivers—growing population, improving healthcare awareness and increasing per capita income.
  • The domestic formulation market was USD 7.6 billion in FY09 and is expected to grow at a CAGR of 14.4 percent till FY14(as per Crisil Research).
  • Long-term demand is likely to be driven by chronic and life-style diseases segments.
  • Healthy growth of the rural pharma market is driven by a variety of factors such as rising disposable incomes, improving awareness levels among the rural population and doctors, increased focus of Indian pharma companies and the strategies adopted by them.

Generic exports

  • Drugs worth an estimated USD 137 billion are expected to go offpatent in the US and Europe over the next five years.(as per India-Pharma IIFL Report 1Q2009).
  • Focus shifting from EU / US markets to semi-regulated markets.

Contract Research and Manufacturing Services (CRAMS)

  • Segment gaining traction on the back of increasing CRAMS deals between Indian companies and MNCs.
  • Although India currently accounts for approximately 3 percent of the global CRAMS market and 2 percent of the clinical trials market, this is expected to increase in the future(as per Reliance Money ‘Indian Pharma CRAMS’ July 15, 2008, RNCOS ’‘Booming Clinical Trials Market in India’, January 2009).
  • India is gradually emerging as the preferred outsourcing destination for activities spanning the pharma value chain.

Discovery research

  • Increasing number of in-licensing and out-licensing deals and collaborative research.
  • Over 60 New Chemical Entities (NCEs) are under various stages of development in the pipelines of the leading Indian companies.

Industry Snapshot

Size (FY09E) USD 19.4 bn
CAGR (FY04-FY09 and thereafter till FY14 ) 20.6 percent and 17.8 percent
Size (2014 Projected) USD 43.8 bn
Volume-wise 10 percent of global market (3rd largest in the world)
Value-wise 14th among drug producing countries, (1.9 percent of the global market)
Exports (FY09E) USD 11.7 bn
Select foreign players in India GlaxoSmithKline, Novartis, Pfizer, Wyeth, Abbott, Astrazeneca, Aventis

Source: CRISIL Research 2010, First Global Report January 2010

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