The Growth of the Indian Pharmaceutical Industry
Trends and statistics of progress
The Pharmaceutical Industry in India has undergone a tremendous growth at a rate of about 12% per year since 2008. India currently ranks third in the world with respect to production volume and ranks 14th with respect to product value (15% of the global segment). The Indian pharmaceutical market is believed to be capable of generating a sales turnover of approximately 74 billion US$ by 2020, a tremendous improvement from the current turnover of 11 billion US$. The pharmaceutical market in India has grown in leaps and bounds at the rate of 15.7% during 2011, with major contributors in the arena of anti-diabetics, asthma, cancer and vitamins. The growth of the Indian pharmaceutical companies can also be attributed to the fact that drugs cost the lowest in India, approximately 5-50% less compared to other developed countries. The growth of the Indian pharmaceutical industry has been accelerated by export of products to a number of countries which possess a major share in the highly advanced regulated global markets such as the United States and European Union. This growth has been attributed to the increase in the average life expectancy and rise in average income or wages in addition to an increased awareness about the numerous benefits of health insurance among prospective consumers. The Indian Pharmaceutical Industry also possesses the top spot amongst the many science-based industries in India with enviable capabilities in the field of drug manufacture and technology. The Indian Pharmaceutical Industry also possesses the distinction of ranking very high among all the third world countries with respect to technology, quality and the innumerable medicines that are produced on a large scale every day.
The Indian pharmaceutical companies can be broadly classified into two types: Indian origin or domestic companies and foreign companies or MNCs. Some important companies include Biocon, GlaxoSmithKline, Ranbaxy, Cipla, Pfizer and Dr. Reddy’s Laboratories etc. India is fast emerging to be the destination for all types of pharmaceutical manufacturing and research programs. India retains the top spot in the world in terms of export of generic medicines worth approximately US $ 11 billion. The domination of generic medicines is expected to continue while patent-protected products are likely to constitute 10% of the total market till 2015, as per the findings by the McKinsey report.
The healthy growth exhibited by Multinational drug companies in the Indian market is encouraging for further investment opportunities. In the year 2011, 13 out of 25 top brands of medicine with respect to sales turnover were the global drug MNCs such as Pfizer, GSK and Novartis.
The strict adherence to pre-determined standards of purity, stability and safety in terms of health and environmental protection during production and supply of drugs in bulk to the global market are added advantages of Indian pharmaceutical companies. A number of Indian companies are presently seeking regulatory approvals in USA in certain specialized fields such as in the manufacture and supply of anti-infective drugs, Cardio vascular medicines, Central Nervous System medicines etc.
India currently has the largest number of United States FDA-approved plants for generic manufacture. The major chunk of export of drugs to western countries underlines the fact that the improved and sophisticated technology and adherence to strict guidelines of the Good Manufacturing Practices by Indian pharmaceutical companies has contributed to growth of Indian pharmaceutical industry owing to its excellent quality and price competitiveness.
The scenario in the Indian pharmaceutical industry seems to be promising and a progressive robust growth is expected. This is due to the rise in middle-class population, changing lifestyle trends, innovations in technology and medical infrastructure as well as increasing awareness of intellectual property rights. The reservoir of genuine talent in terms of expert scientists in the field of pharmacy, researchers and doctors who work in tandem to discover new drugs adhering to intellectual property rights jointly are opening up new areas of research. Skilled researchers and workers are the need of the hour in pharmaceutical industries in the fields of research and development, production, marketing and sales, quality control as well as Intellectual property rights. The Pharmaceutical industry has the ability to attract talented workers even during global financial crisis as it is stable and not affected by recession.
Challenges faced by pharmaceutical companies:
The challenges to be faced by pharmaceutical companies’ lies in the following areas:
-The ability to sift and hire genuine talent as well as retain them.
-To be flexible and adopt innovations in the field of science and technology to suit the needs of the company to generate the maximum output in terms of production.
-To effectively manage the entire process of manufacture of the product.
-To ensure compliance to the standards of regulation and thereby emphasize on Quality Assurance (QA).
-The backbone of the pharmaceutical company comprises of competent, talented and skilled workforce who have to be constantly motivated as they are central to the success of any industry. This helps to ensure safe and effective contribution to the field of healthcare and also brings about the growth of the Indian pharmaceutical industry.
The fact that at least 10 Indian companies are engaged in the discovery of new drugs involved in the treatment of infections, metabolic disorders involving diseases like diabetes, respiratory disorders, obesity and cancer is indeed encouraging. Many of these companies have consequently hiked their R&D expenditure to more than 5% of their sales returns. Commendable success has been achieved by some Indian companies in out-licensing new drugs in the area of asthma and diabetes to companies abroad. The introduction of Product Patent is an added feature for the Indian Pharmaceutical industry.
India is a very attractive destination for outsourcing of R&D due to low-cost scientific work force, decent infrastructure and adherence to guidelines with respect to maintenance of quality. Therefore, many of the global pharmaceutical giants are keen to outsource manufacturing processes from Indian pharmaceutical companies owing to lower costs compared to Western companies.
All these and more advantages promise to make India the region’s hub for research and discovery of drugs and for conducting researches in biotechnology, along with production, exporting and health care services within the next ten years.