13-11-2012, 11:08 AM
OVERVIEW OF pharma industry
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OVERVIEW
India is today recognized as one of the leading global players in pharmaceuticals. Globally the Indian pharmaceutical industry ranks 4th in terms of volume (with an 8 per cent share in global sales), 13th in terms of value (with a share of 1 per cent in global sales) and produces 20-24 per cent of the world's generic drugs (in terms of value).
Internationally recognized as amongst the lowest-cost-producers of drugs.
Indian Pharma Industry is around Rs.40000 Cr. & growing @ 17% per annum*. It is estimated that by the year 2012, the Indian pharmaceutical industry has the potential to achieve over Rs.1,00,000 crore production of formulations and bulk drugs.
*Source: ORG-IMS> ORG IMS is a leading market research agency, providing business intelligence about the pharmaceutical market. ORG IMS track and assess billions of transactions, from more than 1 million drug products and measure 75% of ethical drug sales which supports more than 3,000 pharma manufacturers through 29,000 data suppliers and 225,000 chemists.
The Indian Pharmaceutical industry has been witnessing phenomenal growth in recent years, driven by rising consumption levels in the country and strong demand from export markets.
This segment of Industry has shown tremendous progress in terms of infrastructure development, technology base and wide range of products.
The industry now produces bulk drugs belonging to all major therapeutic groups requiring complicated manufacturing processes and has also developed excellent GMP (Good Manufacturing Practices) compliant facilities for the production of different dosage forms.
INVESTMENTS:
According to Ministry of Commerce and Industry, Domestic investment in the Pharmaceuticals sector is estimated at Rs. 31.43 thousand crores, which is equivalent to US $ 7.14 billions.
Domestic industrial proposals between August 1991-March 2008 are concerned, total Industrial Entrepreneur Memorandum (IEMs) filed including Letter Of Intent (LOI) & Direct Industrial Licenses (DIL) add up to Rs. 31257 crores in Drugs & Pharmaceutical Sector, according to Ministry of Commerce & Industry.
According to the Ministry of Commerce & Industry, Pharmaceutical sector is estimated to have created 2.20 lakh employment opportunities.
Recent Initiatives in Pharma sector
Government has taken various policy initiatives for the Pharma sector-
1. has offered fiscal incentives to R&D units in Pharma sector
2. Steps have been taken to streamline procedures covering development of new drug molecules, clinical research etc.
3. Government has also come up with two new schemes specially targeted at drugs & pharmaceutical research. These are: 'The New Millennium Indian Technology Leadership Initiative' (NMITLI) and the 'Drugs and Pharmaceuticals Research Programme' (DPRP).
HISTORY OF PHARMACEUTICAL INDUSTRY
The first Indian pharmaceutical company, Bengal Chemicals and Pharmaceutical Works, which still exists today as one of 5 government-owned drug manufacturers, appeared in Calcutta in 1930.
For the next 60 years, most of the drugs in India were imported by multinationals either in fully-formulated or bulk form.
The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970, enabled the industry to become what it is today.
This patent act removed composition patents from food and drugs, and though it kept process patents, these were shortened to a period of five to seven years.
The lack of patent protection made the Indian market undesirable to the multinational companies that had dominated the market, and while they streamed out, Indian companies started to take their places.
They carved a niche in both the Indian and world markets with their expertise in reverse-engineering new processes for manufacturing drugs at low costs. Although some of the larger companies have taken baby steps towards drug innovation, the industry as a whole has been following this business model until the present.
Swot Analysis of INDIAN PHARMA INDUSTRY
Strengths:
1. Indian manufacturers are one of the lowest cost producers of drugs in the world. With a scalable labor force, Indian manufactures can produce drugs at 40% to 50% of the cost to the rest of the world. In some cases, this cost is as low as 90%.
2. Fast changing lifestyles in urban and to some extent rural centers, opens a huge market for lifestyle drugs, which has low contribution in the Indian markets, as of now.
3. Indian pharmaceutical industry possesses excellent chemistry and process reengineering skills. This adds to the competitive advantage of the Indian companies. The strength in chemistry skill helps Indian companies to develop processes, which are cost effective.
4. With the introduction of VAT, medicine prices have been standardized
and price discrimination, in which different states pay different prices for the same products, has reduced. VAT has also helped reduce the illegal interstate transfer of goods and the unethical interstate trade for higher margins.
5. Large pool of skilled technical manpower.
6. Increasing liberalization of government policies.