Advantages of Pharma in India, Market Share and Economic Drivers, Structure of Pharma Sector, Evolution of Pharma, Revenue %, Market Share, Porter 5 Force Model, BCG Matrix, Government Policies, Opportunities.

1. 04/13/17
PHARMACEUTICAL INDUSTRY
Mufaddal Nullwala
Business Environment - Sem III
MIM - 15-I-131

2. 04/13/17
• The Indian pharmaceuticals market is the third largest in terms of volume and
thirteenth largest in terms of value.
• India is the largest provider of generic drugs globally with the Indian generics
accounting for 20 per cent of global exports in terms of volume.
• The country also has a large pool of scientists and engineers who have the
potential to steer the industry ahead to an even higher level.
• Presently over 80 per cent of the antiretroviral drugs used globally to combat AIDS
(Acquired Immuno Deficiency Syndrome) are supplied by Indian pharmaceutical
firms.
• The UN-backed Medicines Patent Pool has signed six sub-licences with Aurobindo,
Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing them to make
generic anti-AIDS medicine Tenofovir Alafenamide (TAF) for 112 developing
countries.
• The Indian pharma industry, which is expected to grow over 15 per cent per
annum between 2015 and 2020, will outperform the global pharma industry,
which is set to grow at an annual rate of 5 per cent between the same period.
Introduction

3. 04/13/17
Advantage: INDIA
Leading pharma
producer
One of the highest
exports
Rapidly growing
healthcare sector
Growing generics
market
Ranked 5th in terms of
attracting FDI
Among fastest growing
industries
• Indian pharmaceutical sector accounts for about 2.4 per cent of the global pharmaceutical
industry in value terms and 10 per cent in volume terms
• India accounts for 20 per cent of global exports in generics. In FY15,
pharmaceuticals industry of India exported products worth USD15 billion and the exports
are expected to reach USD40 billion by 2020
• Indian healthcare sector, one of the fastest growing sectors, is expected to advance at a
CAGR of 17 per cent to reach USD250 billion over 2008–20
• The generics market is expected to grow to USD26.1 billion by 2016 from USD21 billion in
2015. India’s generics market has immense potential for growth
• Attracted 5 per cent of the total FDIs into India from April 2000 to September 15
• Cumulative FDI inflows worth USD13.32 billion from April 2000 to September 15
• The country’s pharmaceutical industry is expected to expand at a CAGR of 12.89 per cent
over 2015–20 to reach USD55 billion

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2015
Market
size:
USD30
billion
2020F
Market
size:
USD55
billion
Advantage: INDIA
• India’s cost of production is approximately
60 per cent lower than that of the US and
almost half of that of Europe
• Due to lower cost of treatment, India is
emerging as a leading destination for
medical tourism
Economic drivers
• Economic prosperity to improve drug
affordability
• Increasing penetration of health
insurance
• With increasing penetration of chemists,
especially in rural India, OTC drugs will be
readily available
• Government unveiled ‘Pharma
Vision 2020’ aimed at making India
a global leader in end-to-end drug
manufacture
• Reduced approval time for new
facilities to boost investments
• In this sector, 100 per cent FDI is
allowed under automatic route
• Over 60,000 generic brands across 60
therapeutic categories. Manufactures more
than 500 different APIs
• 49 per cent of all drug master filings from
India is registered in the USA
Policy support
Diversified portfolio
•Accounts for over 10 per cent of the
global pharmaceutical production

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Chronic Acute
Structure of Pharma Sector
Pharmaceuticals
Active Pharmaceutical
Ingredients/
Bulk drugs
Formulations
Branded Generics
• Cardiovascular
• Anti-diabetes
• Gastro-intestinal
• Neurological
• Anti-infectives
• Respiratory
• Pain
• Gynaecology

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Evolution of Pharma in India

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API is the Largest Segment in India

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Revenue in India
The Indian pharmaceuticals market increased at a CAGR of
17.46 per cent in 2015 from USD6 billion in 2005 and
is expected to expand at a CAGR of 15.92 per cent to
USD55 billion by 2020
Increase in the size of middle class households coupled
with the improvement in medical infrastructure and increase
in the penetration of health insurance in the country will also
influence in the growth of pharmaceuticals sector.
By 2020, India is likely to be among the top three pharmaceutical markets by incremental
growth and sixth largest market globally in absolute size
30
India’s cost of production is significantly lower than that
of the US and almost half of that of Europe. It
gives a competitive edge to India over others.
Revenue of Indian pharmaceutical sector
(USD billion)
2005 2013 2015 2020F
6
12
55

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Market Share
Revenue share of Indian pharmaceutical
sub-segments in 2015 (%)
With 70 per cent of market share (in terms of
revenues), generic drugs form the largest segment of
the Indian pharmaceutical sector
India supply 20 per cent of global generic medicines market
exports in terms of volume, making the country the
largest provider of generic medicines globally and
expected to expand even further in coming years
Over the Counter (OTC) medicines and patented drugs
constitute 21 per cent and 9 per cent, respectively, of
total market revenues of USD20 billion
70%
9%
9%

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Porters Five Force Analysis

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Opportunities in India Pharma Industry
High-end drugs
• Due to increasing
population and income
levels, demand for
high-end drugs is
expected to rise
• Demand for high-end
drugs could reached
USD7.5 billion in 2015
• Growing demand could
open up the market for
production of high-end
drugs in India
Penetration in rural
market
• With 70 per cent of
India’s population
residing in rural areas,
pharma companies
have immense
opportunities to tap this
market
• Demand for generic
medicines in rural
markets has seen a
sharp growth. Various
companies are
investing in the
distribution network in
rural areas
CRAMS
• The Contract Research
and Manufacturing
Services industry
(CRAMS) – estimated
at USD8 billion in 2015,
up from USD3.8 billion
in 2012 has a huge
potential for
investments
• The market has more
than 1,000 players
Clinical trials market
• India is among the
leaders in the clinical
trial market
• Due to a genetically
diverse population and
availability of skilled
doctors, India has the
potential to attract huge
investments to its
clinical trial market
• From 2009 to 2015,
3043 clinical trial has
been carried out in
India

12. 04/13/17
Industry Showcase
Serum Institute of India Ltd is the world's largest
vaccine manufacturer by number of doses produced
and sold globally (more than 1.3 billion doses) which
includes Polio vaccine as well as Diphtheria, Tetanus,
Pertussis, Hib, BCG, r-Hepatitis B, Measles, Mumps
and Rubella vaccines.
Biocon, India's largest biotech company is focused on
delivering affordable innovation. The company is
committed to reduce therapy costs of chronic
diseases like diabetes, cancer and autoimmune
diseases by leveraging India's cost advantage to
deliver affordable healthcare solutions to patients,
partners and healthcare systems across the globe
Established in 1977, Mumbai-based Glenmark
Pharmaceuticals Ltd is a leading player in the
discovery of new molecules, both NCEs (new chemical
entity) and NBEs (new biological entity). The company
has a significant presence in branded generics
markets across emerging economies, including India.
Glenmark’s business is currently organized around the
world

13. 04/13/17
Industry Showcase
Cipla is a global pharmaceutical company whose goal
is ensuring no patient shall be denied access to high
quality & affordable medicine and support. Cipla’s
journey began in 1935 when its founder, Dr K A
Hamied, set up an enterprise with the vision to make
India self-sufficient in healthcare. Over the past 77
years, they have emerged as one of the most
recognized brands in the world.
Ranbaxy Laboratories was established in 1961. It is a
research-based international pharmaceutical
company serving customers in over 150 countries and
has experience of more than 50 years in providing
high quality, affordable medicines trusted by
healthcare professionals and patients. Ranbaxy is a
member of the Daiichi Sankyo Group which is a
leading pharmaceutical brand in the world.

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BCG Matrix for Pharma Industry

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Policy Measure by Goverment

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Pharma in Nutshell

17. 04/13/17
• The Indian pharmaceutical market size is expected to grow to US$ 100 billion by
2025, driven by increasing consumer spending, rapid urbanisation, and raising
healthcare insurance among others.
• Going forward, better growth in domestic sales would also depend on the ability
of companies to align their product portfolio towards chronic therapies for
diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-
cancers that are on the rise.
• The Indian government has taken many steps to reduce costs and bring down
healthcare expenses. Speedy introduction of generic drugs into the market has
remained in focus and is expected to benefit the Indian pharmaceutical
companies. In addition, the thrust on rural health programmes, lifesaving drugs
and preventive vaccines also augurs well for the pharmaceutical companies.
Road Ahead

18. 04/13/17
PHARMACEUTICAL INDUSTRY
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